VENTAS INC (Form: 10-K, Received: 02/14/2017 06:03:27)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



(Mark One)
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2016
OR
¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 1-10989

VENTAS, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware (State or Other Jurisdiction of Incorporation or Organization)		61-1055020 (IRS Employer Identification No.)
353 N. Clark Street, Suite 3300, Chicago, Illinois (Address of Principal Executive Offices)		60654 (Zip Code)

(877) 483-6827

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $0.25 per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of shares of the Registrant’s common stock held by non-affiliates of the Registrant on June 30, 2016, based on a closing price of the common stock of $72.82 as reported on the New York Stock Exchange, was $21.1 billion . For purposes of the foregoing calculation only, all directors, executive officers and 10% beneficial owners of the Registrant have been deemed affiliates.

As of February 9, 2017 , 354,623,008 shares of the Registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on May 18, 2017 are incorporated by reference into Part III, Items 10 through 14 of this Annual Report on Form 10-K.

CAUTIONARY STATEMENTS

Unless otherwise indicated or except where the context otherwise requires, the terms “we,” “us” and “our” and other similar terms in this Annual Report on Form 10-K refer to Ventas, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements regarding our or our tenants’, operators’, borrowers’ or managers’ expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust (“REIT”), plans and objectives of management for future operations, and statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from our expectations. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

Our actual future results and trends may differ materially from expectations depending on a variety of factors discussed in our filings with the Securities and Exchange Commission (the “SEC”). These factors include without limitation:


•	The ability and willingness of our tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their respective contractual arrangements with us, including, in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;


•	The ability of our tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness;


•	Our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments;


•	Macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations, and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates;


•	The nature and extent of future competition, including new construction in the markets in which our seniors housing communities and office buildings are located;


•	The extent and effect of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates;


•	Increases in our borrowing costs as a result of changes in interest rates and other factors;


•	The ability of our tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of our properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients;


•	Changes in general economic conditions or economic conditions in the markets in which we may, from time to time, compete, and the effect of those changes on our revenues, earnings and funding sources;


•	Our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due;


•	Our ability and willingness to maintain our qualification as a REIT in light of economic, market, legal, tax and other considerations;


•	Final determination of our taxable net income for the year ended December 31, 2016 and for the year ending December 31, 2017 ;


•	The ability and willingness of our tenants to renew their leases with us upon expiration of the leases, our ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant;

•

Risks associated with our senior living operating portfolio, such as factors that can cause volatility in our operating income and earnings generated by those properties, including without limitation national and regional economic conditions, development of new competing properties, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties;


•	Changes in exchange rates for any foreign currency in which we may, from time to time, conduct business;


•	Year-over-year changes in the Consumer Price Index (“CPI”) or the U.K. Retail Price Index and the effect of those changes on the rent escalators contained in our leases and on our earnings;


•	Our ability and the ability of our tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers;


•	The impact of increased operating costs and uninsured professional liability claims on our liquidity, financial condition and results of operations or that of our tenants, operators, borrowers and managers and our ability and the ability of our tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims;


•	Risks associated with our office building portfolio and operations, including our ability to successfully design, develop and manage office buildings and to retain key personnel;


•	The ability of the hospitals on or near whose campuses our medical office buildings (“MOBs”) are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups;


•	Risks associated with our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our joint venture partners’ financial condition;


•	Our ability to obtain the financial results expected from our development and redevelopment projects, including projects undertaken through our joint ventures;


•	The impact of market or issuer events on the liquidity or value of our investments in marketable securities;


•	Consolidation in the seniors housing and healthcare industries resulting in a change of control of, or a competitor’s investment in, one or more of our tenants, operators, borrowers or managers or significant changes in the senior management of our tenants, operators, borrowers or managers;


•	The impact of litigation or any financial, accounting, legal or regulatory issues that may affect us or our tenants, operators, borrowers or managers; and


•	Changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on our earnings.

Many of these factors, some of which are described in greater detail under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K, are beyond our control and the control of our management.

Brookdale Senior Living, Kindred, Atria, Sunrise and Ardent Information

Each of Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”) and Kindred Healthcare, Inc. (together with its subsidiaries, “Kindred”) is subject to the reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. The information related to Brookdale Senior Living and Kindred contained or referred to in this Annual Report on Form 10-K has been derived from SEC filings made by Brookdale Senior Living or Kindred, as the case may be, or other publicly available information or was provided to us by Brookdale Senior Living or Kindred, and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy. We are providing this data for informational purposes only, and you are encouraged to obtain Brookdale Senior Living’s and Kindred’s publicly available filings, which can be found on the SEC’s website at www.sec.gov.

Atria Senior Living, Inc. (“Atria”), Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”) and Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) are not currently subject to the reporting requirements of the SEC. The information related to Atria, Sunrise and Ardent contained or referred to in this Annual Report on Form 10-K has been derived from publicly available information or was provided to us by Atria, Sunrise or Ardent, as the case may be, and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy.

TABLE OF CONTENTS



PART I
Item 1.	Business	1
Item 1A.	Risk Factors	24
Item 1B.	Unresolved Staff Comments	39
Item 2.	Properties	40
Item 3.	Legal Proceedings	42
Item 4.	Mine Safety Disclosures	42
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	43
Item 6.	Selected Financial Data	46
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	79
Item 8.	Financial Statements and Supplementary Data	80
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	186
Item 9A.	Controls and Procedures	186
Item 9B.	Other Information	186
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	186
Item 11.	Executive Compensation	186
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	186
Item 13.	Certain Relationships and Related Transactions, and Director Independence	187
Item 14.	Principal Accountant Fees and Services	187
PART IV
Item 15.	Exhibits and Financial Statement Schedules	188

iii

PART I

ITEM 1. Business

BUSINESS

Overview

Ventas, Inc., an S&P 500 company, is a REIT with a highly diversified portfolio of seniors housing and healthcare properties located throughout the United States, Canada and the United Kingdom. As of December 31, 2016 , we owned approximately 1,300 properties (including properties owned through investments in unconsolidated entities and properties classified as held for sale), consisting of seniors housing communities, MOBs, life science and innovation centers, skilled nursing facilities, specialty hospitals and general acute care hospitals, and we had six properties under development, including one property that is owned by an unconsolidated real estate entity. Our company was originally founded in 1983 and is currently headquartered in Chicago, Illinois.

We primarily invest in seniors housing and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party managers. As of December 31, 2016 , we leased a total of 549 properties (excluding MOBs and 33 properties owned through investments in unconsolidated entities) to various healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and we engaged independent operators, such as Atria and Sunrise, to manage 298 seniors housing communities (excluding one property owned through investments in unconsolidated entities) for us pursuant to long-term management agreements.

Our three largest tenants, Brookdale Senior Living, Kindred and Ardent leased from us 140 properties (excluding six properties owned through investments in unconsolidated entities and excluding one property managed by Brookdale Senior Living pursuant to a long-term management agreement), 68 properties (excluding one MOB) and ten properties, respectively, as of December 31, 2016 .

Through our Lillibridge Healthcare Services, Inc. (“Lillibridge”) subsidiary and our ownership interest in PMB Real Estate Services LLC (“PMBRES”), we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and other loans and investments relating to seniors housing and healthcare operators or properties.

In September 2016, we completed the acquisition of substantially all of the university affiliated life science and innovation real estate assets of Wexford Science & Technology, LLC (“Wexford”) from affiliates of Blackstone Real Estate Partners VIII, L.P. (together with its affiliates, “Blackstone”) (the “Life Sciences Acquisition”). As a result, we renamed our MOB operations reportable business segment “office operations,” which now includes both MOBs and life science assets.

We operate through three reportable business segments: triple-net leased properties, senior living operations and office operations. See our Consolidated Financial Statements and the related notes, including “ NOTE 2—ACCOUNTING POLICIES ,” included in Part II, Item 8 of this Annual Report on Form 10-K.

Business Strategy

We aim to enhance shareholder value by delivering consistent, superior total returns through a strategy of: (1) generating reliable and growing cash flows; (2) maintaining a balanced, diversified portfolio of high-quality assets; and (3) preserving our financial strength, flexibility and liquidity.

Generating Reliable and Growing Cash Flows

Generating reliable and growing cash flows from our seniors housing and healthcare assets enables us to pay regular cash dividends to stockholders and creates opportunities to increase stockholder value through profitable investments. The combination of steady contractual growth from our long-term triple-net leases, steady, reliable cash flows from our loan investments and stable cash flows from our office buildings with the higher growth potential inherent in our seniors housing operating communities drives our ability to generate sustainable, growing cash flows that are resilient to economic downturns.

Maintaining a Balanced, Diversified Portfolio

We believe that maintaining a balanced portfolio of high-quality assets diversified by investment type, geographic location, asset type, tenant/operator, revenue source and operating model diminishes the risk that any single factor or event could materially harm our business. Portfolio diversification also enhances the reliability of our cash flows by reducing our exposure to any individual tenant, operator or manager and making us less susceptible to single-state regulatory or reimbursement changes, regional climate events and local economic downturns.

Preserving Our Financial Strength, Flexibility and Liquidity

A strong, flexible balance sheet and excellent liquidity position us favorably to capitalize on strategic growth opportunities in the seniors housing and healthcare industries through acquisitions, investments and development and redevelopment projects. We maintain our financial strength to pursue profitable investment opportunities by actively managing our leverage, improving our cost of capital and preserving our access to multiple sources of liquidity, including unsecured bank debt, mortgage financings and public debt and equity markets.

2016 Highlights and Other Recent Developments

Investments and Dispositions


•	In September 2016, we completed the acquisition of substantially all of the university affiliated life science and innovation real estate assets of Wexford from Blackstone for total consideration of $1.5 billion . The Life Sciences Acquisition added to our portfolio 23 operating properties, two development assets and nine future development sites.

•

In October 2016, we committed to provide secured debt financing in the amount of $700.0 million to a subsidiary of Ardent to facilitate Ardent’s acquisition of LHP Hospital Group, Inc. (“LHP”). The loan (the “Loan”) has a five -year term and is LIBOR-based with an initial interest rate of approximately 8.0% and is guaranteed by Ardent’s parent company. Ardent will also receive an equity contribution from its majority owner, an affiliate of Equity Group Investments. The Loan is subject to the satisfaction of customary closing conditions. Ardent’s acquisition of LHP is expected to close in the first quarter of 2017, but there can be no assurance as to whether, when or on what terms Ardent’s acquisition of LHP or the Loan will be completed.


•	During 2016, we made a $140.0 million secured mezzanine loan investment relating to Class A life sciences properties in California and Massachusetts, that has an annual interest rate of 9.95% , and we acquired two MOBs, one triple-net leased seniors housing asset and other investments for approximately $42.3 million .


•	During the year ended December 31, 2016, we sold 29 triple-net leased properties, one seniors housing community included in our senior living operations reportable business segment and six MOBs for aggregate consideration of $300.8 million . We recognized a gain on the sales of these assets of $98.2 million (net of taxes).


•	During 2016, we received aggregate proceeds of $309.0 million in final repayment of three secured loans receivable and partial repayment of one secured loan receivable and recognized gains of $9.6 million on the repayment of these loans receivable.

Capital and Dividends


•	During 2016, we issued and sold 18.9 million shares of common stock under our “at-the-market” (“ATM”) equity offering program and public offerings. Aggregate net proceeds for these activities were $1.3 billion , after sales agent commissions.


•	In May 2016, we repaid $100.0 million outstanding on our unsecured term loan due 2019 using cash on hand.


•	In May 2016, we issued and sold $400.0 million aggregate principal amount of 3.125% senior notes due 2023 at a public offering price equal to 99.343% of par, for total proceeds of $397.4 million before the underwriting discount and expenses.


•	In June 2016, we redeemed $455.5 million aggregate principal amount then outstanding of our 1.55% senior notes due September 2016 at a public offering price of 100.335% of par, plus accrued and unpaid interest to the redemption date. In July 2016, we repaid the remaining balance then outstanding of our 1.55% senior notes due September 2016.


•	In September 2016, we issued and sold $450.0 million aggregate principal amount of 3.25% senior notes due 2026 at a public offering price equal to 99.811% of par, for total proceeds of $449.1 million before the underwriting discount and expenses.


•	In 2016, we paid an annual cash dividend on our common stock of $2.965 per share. In December 2016, our fourth quarter 2016 dividend grew by 6% over third quarter 2016 to $0.775.

Portfolio

•

In April 2016, we entered into several agreements with Kindred to improve the quality and productivity of the long term acute care hospital (“LTAC”) portfolio leased by Ventas to Kindred. Certain of the agreements consist of lease amendments to the Kindred master leases, for which we received a $3.5 million fee. Under these lease amendments, annual rent on seven identified LTACs (the “7 LTACs”), which was approximately $8 million , was immediately re-allocated to other more productive post-acute assets subject to the Kindred master leases. Separately, in October 2016, we sold the 7 LTACs to an unrelated third party for $3.0 million , and recognized a gain of $2.9 million .

•

In September 2016, we modified existing agreements with Sunrise related to the management of certain of the seniors housing communities owned by us and operated by Sunrise to reduce management fees payable to Sunrise under such agreements, maintain the existing term of such agreements and provide Sunrise with incentives for future outperformance. We also entered into a new multi-year development pipeline agreement with Sunrise that gives us the option to fund certain future Sunrise developments.

•

In November 2016, we entered into agreements with Kindred providing that (i) Kindred will either acquire all 36 SNFs owned by us and operated by Kindred for $700 million , in connection with Kindred’s previously announced plan to exit its SNF business, or renew the current lease on all unpurchased SNFs through 2025 at the current rent level; and (ii) Kindred has extended the lease term to 2025 for all of our LTACs operated by Kindred that were scheduled to mature in 2018 and 2020, at the current rent level.

Portfolio Summary

The following table summarizes our consolidated portfolio of properties and other investments (including properties classified as held for sale and excluding properties owned through investments in unconsolidated entities) as of and for the year ended December 31, 2016 :



			Real Estate Property Investments						Revenues
Asset Type	# of Properties ⁽¹⁾	# of Units/ Sq. Ft./Beds ⁽²⁾	Real Estate Property Investment, at Cost		Percent of Total Real Estate Property Investments		Real Estate Property Investment Per Unit/Bed/Sq. Ft.		Revenue		Percent of Total Revenues
	(Dollars in thousands)
Seniors housing communities	744	65,175	$	16,074,611	61.8	%	$	246.6	$2,351,473		68.4	%
MOBs ⁽³⁾	365	20,443,999	5,393,841		20.7		0.3		599,058		17.4
Life science and innovation centers	23	4,272,185	1,587,915		6.1		0.4		52,354		1.5
Skilled nursing facilities	53	6,279	358,329		1.4		57.1		75,985		2.2
Specialty hospitals	38	3,282	453,166		1.7		138.1		160,009		4.6
General acute care hospitals	12	2,064	1,459,353		5.6		707.1		105,673		3.1
Total properties	1,235		25,327,215		97.3				3,344,552		97.2
Secured loans receivable and investments, net			702,021		2.7				98,094		2.8
Interest and other income			—		—				876		0.0
Total			$	26,029,236	100.0	%			$	3,443,522	100.0	%

⁽¹⁾

As of December 31, 2016 , we also owned 21 seniors housing communities, 13 skilled nursing facilities and five MOBs through investments in unconsolidated entities. Our consolidated properties were located in 46 states, the District of Columbia, seven Canadian provinces and the United Kingdom and, excluding MOBs, were operated or managed by 94 unaffiliated healthcare operating companies, including the following publicly traded companies or their subsidiaries: Brookdale Senior Living ( 140 properties) (excluding six properties owned through investments in unconsolidated entities and one property managed by Brookdale Senior Living pursuant to a long-term management agreement); Kindred ( 68 properties) (excluding one MOB); 21st Century Oncology Holdings, Inc. ( 12 properties); Capital Senior Living Corporation ( 12 properties); Spire Healthcare plc ( three properties); and HealthSouth Corp. ( four properties).


⁽²⁾	Seniors housing communities are measured in units; MOBs and life science and innovation centers are measured by square footage; and skilled nursing facilities, specialty hospitals and general acute care hospitals are measured by bed count.


⁽³⁾	As of December 31, 2016 , we leased 67 of our consolidated MOBs pursuant to triple-net leases, Lillibridge or PMBRES managed 279 of our consolidated MOBs and 19 of our consolidated MOBs were managed by eight unaffiliated managers. Through Lillibridge and PMBRES, we also provided management and leasing services for 90 MOBs owned by third parties as of December 31, 2016 .

Seniors Housing and Healthcare Properties

As of December 31, 2016 , we owned a total of 1,274 seniors housing and healthcare properties (including properties owned through investments in unconsolidated entities and properties classified as held for sale) as follows:



	Consolidated (100% interest)	Consolidated (<100% interest)	Unconsolidated (5-25% interest)	Total
Seniors housing communities	731	13	21	765
MOBs	332	33	5	370
Life science and innovation centers	15	8	—	23
Skilled nursing facilities	53	—	13	66
Specialty hospitals	37	1	—	38
General acute care hospitals	12	—	—	12
Total	1,180	55	39	1,274

Seniors Housing Communities

Our seniors housing communities include independent and assisted living communities, continuing care retirement communities and communities providing care for individuals with Alzheimer’s disease and other forms of dementia or memory loss. These communities offer studio, one bedroom and two bedroom residential units on a month-to-month basis primarily to elderly individuals requiring various levels of assistance. Basic services for residents of these communities include housekeeping, meals in a central dining area and group activities organized by the staff with input from the residents. More extensive care and personal supervision, at additional fees, are also available for such needs as eating, bathing, grooming, transportation, limited therapeutic programs and medication administration, which allow residents certain conveniences and enable them to live as independently as possible according to their abilities. These services are often met by home health providers, close coordination with the resident’s physician and skilled nursing facilities. Charges for room, board and services are generally paid from private sources.

Medical Office Buildings

Typically, our MOBs are multi-tenant properties leased to several unrelated medical practices, although in many cases they may be associated with a large single specialty or multi-specialty group. Tenants include physicians, dentists, psychologists, therapists and other healthcare providers, who require space devoted to patient examination and treatment, diagnostic imaging, outpatient surgery and other outpatient services. MOBs are similar to commercial office buildings, although they require greater plumbing, electrical and mechanical systems to accommodate physicians’ requirements such as sinks in every room, brighter lights and specialized medical equipment. As of December 31, 2016 , we owned or managed for third parties approximately 24 million square feet of MOBs that are predominantly located on or near an acute care hospital campus.

Life Science and Innovation Centers

Our life science and innovation centers contain laboratory and office space primarily for scientific research for universities, academic medical centers, technology, biotechnology, medical device and pharmaceutical companies and other organizations involved in the life science industry. While these properties have characteristics similar to commercial office buildings, they generally contain more advanced electrical, mechanical, and heating, ventilating and air conditioning systems. The facilities generally have specialty equipment including emergency generators, fume hoods, lab bench tops and related amenities. In many instances, life science tenants make significant investments to improve their leased space, in addition to landlord improvements, to accommodate biology, chemistry or medical device research initiatives. Our life science and innovation centers are primarily located on or contiguous to university and academic medical campuses. The campus settings allow us the opportunity to provide flexible, contiguous/adjacent expansion to accommodate the growth of existing tenants.

Skilled Nursing Facilities

Our skilled nursing facilities provide rehabilitative, restorative, skilled nursing and medical treatment for patients and residents who do not require the high technology, care-intensive, high cost setting of an acute care or rehabilitation hospital. Treatment programs include physical, occupational, speech, respiratory and other therapies, including sub-acute clinical protocols such as wound care and intravenous drug treatment. Charges for these services are generally paid from a combination of government reimbursement and private sources.

Long-Term Acute Care Hospitals

30 of our properties are operated as LTACs. LTACs have a Medicare average length of stay of greater than 25 days and serve medically complex, chronically ill patients who require a high level of monitoring and specialized care, but whose conditions do not necessitate the continued services of an intensive care unit. The operators of these LTACs have the capability to treat patients who suffer from multiple systemic failures or conditions such as neurological disorders, head injuries, brain stem and spinal cord trauma, cerebral vascular accidents, chemical brain injuries, central nervous system disorders, developmental anomalies and cardiopulmonary disorders. Chronic patients often depend on technology for continued life support, such as mechanical ventilators, total parenteral nutrition, respiration or cardiac monitors and dialysis machines, and, due to their severe medical conditions, generally are not clinically appropriate for admission to a nursing facility or rehabilitation hospital. All of our LTACs are freestanding facilities, and we do not own any “hospitals within hospitals.” We also own eight inpatient rehabilitation hospitals devoted to the rehabilitation of patients with various neurological, musculoskeletal, orthopedic and other medical conditions following stabilization of their acute medical issues.

General Acute Care Hospitals

12 of our properties are operated as general acute care hospitals. General acute care hospitals provide medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic services and emergency services. These hospitals also provide outpatient services such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology and physical therapy. In the United States, these hospitals receive payments for patient services from the federal government primarily under the Medicare program, state governments under their respective Medicaid or similar programs, health maintenance organizations, preferred provider organizations, other private insurers and directly from patients.

Geographic Diversification of Properties

Our portfolio of seniors housing and healthcare properties is broadly diversified by geographic location throughout the United States, Canada and the United Kingdom, with properties in only one state ( California ) accounting for more than 10% of our total revenues and total net operating income (“NOI,” which is defined as total revenues, excluding interest and other income, less property-level operating expenses and office building services costs), in each case excluding amounts in discontinued operations, for the year ended December 31, 2016 .

The following table shows our rental income and resident fees and services by geographic location for the year ended December 31, 2016 :



	Rental Income and Resident Fees and Services ⁽¹⁾		Percent of Total Revenues ⁽¹⁾
	(Dollars in thousands)
Geographic Location
California	$	526,388	15.3	%
New York	302,348		8.8
Texas	215,370		6.3
Illinois	167,907		4.9
Florida	153,566		4.5
Pennsylvania	128,937		3.7
Georgia	121,372		3.5
Arizona	107,160		3.1
New Jersey	94,678		2.7
Connecticut	91,712		2.7
Other (36 states and the District of Columbia)	1,212,893		35.1
Total U.S	3,122,331		90.6	%
Canada (7 provinces)	174,813		5.1
United Kingdom	26,338		0.8
Total	$	3,323,482	96.5	%	⁽²⁾


(1)	This presentation excludes revenues from properties included in discontinued operations during 2016 .


(2)	The remainder of our total revenues is office building and other services revenue, income from loans and investments and interest and other income.

The following table shows our NOI by geographic location for the year ended December 31, 2016 :



	NOI ⁽¹⁾⁽²⁾		Percent of Total NOI ⁽¹⁾
	(Dollars in thousands)
Geographic Location
California	$	276,147	13.8	%
New York	117,120		5.9
Texas	140,898		7.0
Illinois	106,831		5.3
Florida	90,742		4.5
Pennsylvania	69,155		3.5
Indiana	58,181		2.9
Arizona	57,519		2.9
North Carolina	54,755		2.7
New Mexico	51,744		2.6
Other (36 states and the District of Columbia)	867,261		43.4
Total U.S	1,890,353		94.5	%
Canada (7 provinces)	83,882		4.2
United Kingdom	26,338		1.3
Total	$	2,000,573	100.0	%


(1)	This presentation excludes NOI from properties included in discontinued operations during 2016 . See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures—NOI” included in Item 7 of this Annual Report on Form 10-K for a reconciliation of NOI to our GAAP earnings.


(2)	For a reconciliation of NOI to its most directly comparable GAAP measure, income from continuing operations, see “Non-GAAP Financial Measures.”

See “ NOTE 19—SEGMENT INFORMATION ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information regarding the geographic diversification of our portfolio.

Loans and Investments

As of December 31, 2016 , we had $754.6 million of net loans receivable and investments relating to seniors housing and healthcare operators or properties. Our loans receivable and investments provide us with interest income, principal amortization and transaction fees and are typically secured by mortgage liens or leasehold mortgages on the underlying properties and corporate or personal guarantees by affiliates of the borrowing entity. In some cases, the loans are secured by a pledge of ownership interests in the entity or entities that own the related seniors housing or healthcare properties. From time to time, we also make investments in mezzanine loans, which are subordinated to senior secured loans held by other investors that encumber the same real estate. See “ NOTE 6—LOANS RECEIVABLE AND INVESTMENTS ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Development and Redevelopment Projects

We are party to certain agreements that obligate us to develop seniors housing or healthcare properties funded through capital that we and, in certain circumstances, our joint venture partners provide. As of December 31, 2016 , we had six properties under development pursuant to these agreements, including one property that is owned by an unconsolidated real estate entity. In addition, from time to time, we engage in redevelopment projects with respect to our existing seniors housing communities to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.

Segment Information

We evaluate our operating performance and allocate resources based on three reportable business segments: triple-net leased properties; senior living operations; and office operations. Non-segment assets, classified as “all other,” consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and investments, and miscellaneous accounts receivable. We evaluate performance of the combined properties in each reportable business segment based on segment NOI and related measures. For further information regarding our business segments and a discussion of our definition of segment NOI, see “ NOTE 19—SEGMENT INFORMATION ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Significant Tenants, Operators and Managers

The following table summarizes certain information regarding our tenant, operator and manager concentration as of and for the year ended December 31, 2016 (excluding properties classified as held for sale as of December 31, 2016 ):



	Number of Properties Leased or Managed	Percent of Total Real Estate Investments ⁽¹⁾		Percent of Total Revenues		Percent of NOI
Senior living operations ⁽²⁾	298	33.9	%	53.6	%	30.2	%
Brookdale Senior Living ⁽³⁾	140	8.1		4.8		8.3
Kindred	69	1.8		5.4		9.2
Ardent	10	5.1		3.1		5.3


(1)	Based on gross book value.


(2)	Excludes one property owned through investments in unconsolidated entities.


(3)	Excludes six properties owned through investments in unconsolidated entities and one property managed by Brookdale Senior Living pursuant to a long-term management agreement.

Triple-Net Leased Properties

Each of our leases with Brookdale Senior Living, Kindred and Ardent is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Kindred and Ardent leases has a corporate guaranty. Brookdale Senior Living and Kindred have multiple leases with us and those leases contain cross-default provisions tied to each other, as well as lease renewals by lease agreement or by pool of assets.

expiration of the terms thereof, our financial condition and results of operations could decline and our ability to service our indebtedness and to make distributions to our stockholders could be impaired. We cannot assure you that Brookdale Senior Living, Kindred and Ardent will have sufficient assets, income and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to do so could have a material adverse effect on our business, financial condition, results of operations or liquidity and our ability to service our indebtedness and other obligations and to make distributions to our stockholders, as required for us to continue to qualify as a REIT (a “Material Adverse Effect”). We also cannot assure you that Brookdale Senior Living, Kindred and Ardent will elect to renew their respective leases with us upon expiration of the leases or that we will be able to reposition any non-renewed properties on a timely basis or on the same or better economic terms, if at all. See “Risks Factors—Risks Arising from Our Business—Our leases with Brookdale Senior Living, Kindred and Ardent account for a significant portion of our triple-net leased properties segment revenues and operating income; Any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to satisfy its obligations under our agreements could have a Material Adverse Effect on us” included in Item 1A of this Annual Report on Form 10-K.

Brookdale Senior Living Leases

As of December 31, 2016 , we leased 140 properties (excluding six properties owned through investments in unconsolidated entities and one property managed by Brookdale Senior Living pursuant to a long-term management agreement) to Brookdale Senior Living pursuant to multiple lease agreements.

Pursuant to our lease agreements, Brookdale Senior Living is obligated to pay base rent, which escalates annually at a specified rate over the prior period base rent. As of December 31, 2016 , the aggregate 2017 contractual cash rent due to us from Brookdale Senior Living, excluding variable interest that Brookdale Senior Living is obligated to pay as additional rent based on certain floating rate mortgage debt, was approximately $178.8 million , and the current aggregate contractual base rent (computed in accordance with U.S. generally accepted accounting principles (“GAAP”)) due to us from Brookdale Senior Living, excluding the variable interest, was approximately $162.6 million (in each case, excluding six properties owned through investments in unconsolidated entities as of December 31, 2016 ). See “ NOTE 3—CONCENTRATION OF CREDIT RISK ” and “ NOTE 14—COMMITMENTS AND CONTINGENCIES ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Kindred Leases

As of December 31, 2016 , we leased 68 properties (excluding one MOB) to Kindred pursuant to multiple lease agreements. The properties leased pursuant to our Kindred master leases are grouped into bundles, or “renewal groups,” with each renewal group containing a varying number of geographically diversified properties. All properties within a single renewal group have the same current lease term of five to 12 years, and each renewal group is currently subject to one or more successive five-year renewal terms at Kindred’s option, provided certain conditions are satisfied. Kindred’s renewal option is “all or nothing” with respect to the properties contained in each renewal group. In November 2016, Kindred extended the lease term to 2025 for all of our LTACs operated by Kindred that were scheduled to mature in 2018 and 2020, at the current rent level.

The aggregate annual rent we receive under each Kindred master lease is referred to as “base rent.” Base rent escalates annually at a specified rate over the prior period base rent, contingent, in the case of the remaining three original Kindred master leases, upon the satisfaction of specified facility revenue parameters. The annual rent escalator under two Kindred master leases is 2.7%, and the annual rent escalator under the other two Kindred master leases is based on year-over-year changes in CPI, subject to floors and caps. As of December 31, 2016 , the aggregate 2017 contractual cash rent due to us from Kindred was approximately $170.1 million , and the current aggregate contractual base rent (computed in accordance with GAAP) due to us from Kindred was approximately $187.7 million .

Ardent Lease

As of December 31, 2016 , we leased ten hospital campuses to Ardent pursuant to a single, triple-net master lease agreement. Pursuant to our master lease agreement, Ardent is obligated to pay base rent, which escalates annually by the lesser of four times the increase in the consumer price index for the relevant period and 2.5%. The initial term of the master lease expires on August 31, 2035 and Ardent has one ten-year renewal option.

As of December 31, 2016 , the aggregate 2017 contractual cash rent due to us from Ardent was approximately $109.2 million , and the current aggregate contractual base rent (computed in accordance with GAAP) due to us from Ardent was also approximately $109.2 million .

Senior Living Operations

As of December 31, 2016 , Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 266 seniors housing communities included in our senior living operations reportable business segment, for which we pay annual management fees pursuant to long-term management agreements. Most of our management agreements with Atria have initial terms expiring either July 31, 2024 or December 31, 2027, with successive automatic ten-year renewal periods. The management fees payable to Atria under most of the Atria management agreements range from 4.5% to 5% of revenues generated by the applicable properties, and Atria can earn up to an additional 1% of revenues based on the achievement of specified performance targets. Most of our management agreements with Sunrise have terms ranging from 25 to 30 years (which commenced as early as 2004 and as recently as 2012). The management fees payable to Sunrise under the Sunrise management agreements generally range from 5% to 7% of revenues generated by the applicable properties. See “ NOTE 3—CONCENTRATION OF CREDIT RISK ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants. However, we rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees and to otherwise operate our seniors housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. Although we have various rights as the property owner under our management agreements, including various rights to terminate and exercise remedies under those agreements as provided therein, Atria’s or Sunrise’s failure, inability or unwillingness to satisfy its respective obligations under those agreements, to efficiently and effectively manage our properties or to provide timely and accurate accounting information with respect thereto could have a Material Adverse Effect on us. In addition, significant changes in Atria’s or Sunrise’s senior management or equity ownership or any adverse developments in their businesses and affairs or financial condition could have a Material Adverse Effect on us. See “Risk Factors—Risks Arising from Our Business—The properties managed by Atria and Sunrise account for a significant portion of our revenues and operating income; Adverse developments in Atria’s or Sunrise’s business and affairs or financial condition could have a Material Adverse Effect on us” and “—We have rights to terminate our management agreements with Atria and Sunrise in whole or with respect to certain properties under certain circumstances, and we may be unable to replace Atria or Sunrise if our management agreements are terminated or not renewed” included in Item 1A of this Annual Report on Form 10-K.

Our 34% ownership interest in Atria entitles us to certain rights and minority protections, as well as the right to appoint two of six members on the Atria Board of Directors.

Competition

We generally compete for investments in seniors housing and healthcare assets with publicly traded, private and non-listed healthcare REITs, real estate partnerships, healthcare providers, healthcare lenders and other investors, including developers, banks, insurance companies, pension funds, government-sponsored entities and private equity firms, some of whom may have greater financial resources and lower costs of capital than we do. Increased competition challenges our ability to identify and successfully capitalize on opportunities that meet our objectives, which is affected by, among other factors, the availability of suitable acquisition or investment targets, our ability to negotiate acceptable transaction terms and our access to and cost of capital. See “Risk Factors—Risks Arising from Our Business—Our pursuit of investments in and acquisitions of, or our development or redevelopment of, seniors housing and healthcare assets may be unsuccessful or fail to meet our expectations” included in Item 1A of this Annual Report on Form 10-K and “ NOTE 10—SENIOR NOTES PAYABLE AND OTHER DEBT ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Our tenants, operators and managers also compete on a local and regional basis with other healthcare operating companies that provide comparable services. Seniors housing community, skilled nursing facility and hospital operators compete to attract and retain residents and patients to our properties based on scope and quality of care, reputation and financial condition, price, location and physical appearance of the properties, services offered, qualified personnel, physician referrals and family preferences. With respect to MOBs, we and our third-party managers compete to attract and retain tenants based on many of the same factors, in addition to quality of the affiliated health system, physician preferences and proximity to hospital campuses. The ability of our tenants, operators and managers to compete successfully could be affected by private, federal and state reimbursement programs and other laws and regulations. See “Risk Factors—Risks Arising from Our Business—Our tenants, operators and managers may be adversely affected by healthcare regulation and enforcement” and “—Changes in the reimbursement rates or methods of payment from third-party payors, including the Medicare and Medicaid programs, could have a material adverse effect on certain of our tenants and operators and on us” included in Item 1A of this Annual Report on Form 10-K.

Employees

As of December 31, 2016 , we had 493 employees, including 263 employees associated with our office operations reportable business segment, but excluding 1,384 employees at our Canadian seniors housing communities under the supervision and control of our independent managers. Although the applicable manager is responsible for hiring and maintaining the labor force at each of our Canadian seniors housing communities, we bear many of the costs and risks generally borne by employers, particularly with respect to those properties with unionized labor. None of our employees is subject to a collective bargaining agreement, other than those employees in the Canadian seniors housing communities managed by Sunrise or Atria. We believe that relations with our employees are positive. See “Risk Factors—Risks Arising from Our Business—Our operating assets expose us to various operational risks, liabilities and claims that could adversely affect our ability to generate revenues or increase our costs and could have a Material Adverse Effect on us” included in Item 1A of this Annual Report on Form 10-K.

Insurance

We maintain or require in our lease, management and other agreements that our tenants, operators and managers maintain all applicable lines of insurance on our properties and their operations. We believe that the amount and scope of insurance coverage provided by our policies and the policies required to be maintained by our tenants, operators and managers are customary for similarly situated companies in our industry. Although we regularly monitor our tenants’, operators’ and managers’ compliance with their respective insurance requirements, we cannot assure you that they will maintain the required insurance coverages, and any failure, inability or unwillingness by our tenants, operators and managers to do so could have a Material Adverse Effect on us. We also cannot assure you that we will continue to require the same levels of insurance coverage under our lease, management and other agreements, that such insurance coverage will be available at a reasonable cost in the future or that the policies maintained will fully cover all losses related to our properties upon the occurrence of a catastrophic event, nor can we assure you of the future financial viability of the insurers.

We maintain the property insurance for all of our senior living operations, as well as the general and professional liability insurance for our seniors housing communities and related operations managed by Atria. However, Sunrise maintains the general and professional liability insurance for our seniors housing communities and related operations that it manages in accordance with the terms of our management agreements. Under our management agreements with Sunrise, we may elect, on an annual basis, whether we or Sunrise will bear responsibility for maintaining the required insurance coverage for the applicable properties, but the costs of such insurance are facility expenses paid from the revenues of those properties, regardless of who maintains the insurance.

Through our office operations, we provide engineering, construction and architectural services in connection with new development projects, and any design, construction or systems failures related to the properties we develop could result in substantial injury or damage to our clients or third parties. Any such injury or damage claims may arise in the ordinary course and may be asserted with respect to ongoing or completed projects. Although we maintain liability insurance to protect us against these claims, if any claim results in a loss, we cannot assure you that our policy limits would be adequate to cover the loss in full. If we sustain losses in excess of our insurance coverage, we may be required to pay the difference and we could lose our investment in, or experience reduced profits and cash flows from, the affected MOB, which could have a Material Adverse Effect on us.

For various reasons, including to reduce and manage costs, many healthcare companies utilize different organizational and corporate structures coupled with self-insurance trusts or captive programs that may provide less coverage than a traditional insurance policy. As a result, companies that self-insure could incur large funded and unfunded general and professional liability expenses, which could have a material adverse effect on their liquidity, financial condition and results of operations. The implementation of a trust or captive by any of our tenants, operators or managers could adversely affect such person’s ability to satisfy its obligations under, or otherwise comply with the terms of, its respective lease, management and other agreements with us, which could have a Material Adverse Effect on us. Likewise, if we decide to implement a captive or self-insurance program, any large funded and unfunded general and professional liability expenses that we incur could have a Material Adverse Effect on us.

Additional Information

We maintain a website at www.ventasreit.com. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

We make available, free of charge, through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition, our Guidelines on Governance, our Global Code of Ethics and Business Conduct (including waivers from and

amendments to that document) and the charters for each of our Audit and Compliance, Nominating and Corporate Governance and Executive Compensation Committees are available on our website, and we will mail copies of the foregoing documents to stockholders, free of charge, upon request to our Corporate Secretary at Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654.

GOVERNMENTAL REGULATION

Healthcare Regulation

Overview

Healthcare is a highly regulated industry and we expect that trend will, in general, continue in the future. Our tenants, operators and managers are typically subject to extensive and complex federal, state and local laws and regulations relating to quality of care, licensure and certificate of need, government reimbursement, fraud and abuse practices, qualifications of personnel, adequacy of plant and equipment, and other laws and regulations governing the operation of healthcare facilities. The applicable rules are wide-ranging and can subject our tenants, operators and managers to civil, criminal, and administrative sanctions, including: the possible loss of accreditation or license; denial of reimbursement; imposition of fines; suspension, decertification, or exclusion from federal and state healthcare programs; or facility closure. Changes in laws or regulations, reimbursement policies, enforcement activity and regulatory non-compliance by tenants, operators and managers can all have a significant effect on their operations and financial condition, which in turn may adversely impact us, as detailed below and set forth under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

The recent U.S. presidential election, coupled with a Republican-controlled Congress, makes the repeal of the Affordable Care Act (“ACA”) a possibility. Beyond this, significant changes to commercial health insurance, Medicare and Medicaid are all possible. Government payors, such as the federal Medicare program and state Medicaid programs, as well as private insurance carriers (including health maintenance organizations and other health plans), are likely to impose greater discounts and more stringent cost controls upon operators (through changes in reimbursement rates and methodologies, discounted fee structures, the assumption by healthcare providers of all or a portion of the financial risk or otherwise). A shift toward less comprehensive health insurance coverage and increased consumer cost-sharing on health expenditures could have a material adverse effect on certain of our operators’ liquidity, financial condition and results of operations and, in turn, their ability to satisfy their contractual obligations, including making rental payments under and otherwise complying with the terms of our leases.

Licensure, Certification and CONs

In general, the operators of our hospitals and skilled nursing facilities must be licensed and periodically certified through various regulatory agencies that determine compliance with federal, state and local laws to participate in the Medicare and Medicaid programs. Legal requirements pertaining to such licensure and certification relate to the quality of medical care provided by the operator, qualifications of the operator’s administrative personnel and clinical staff, adequacy of the physical plant and equipment and continuing compliance with applicable laws and regulations. A loss of licensure or certification could adversely affect a hospital or skilled nursing facility operator’s ability to receive payments from the Medicare and Medicaid programs, which, in turn, could adversely affect its ability to satisfy its obligations to us.

In addition, many of our skilled nursing facilities are subject to state CON laws that require governmental approval prior to the development or expansion of healthcare facilities and services. The approval process in these states generally requires a facility to demonstrate the need for additional or expanded healthcare facilities or services. CONs, where applicable, are also sometimes necessary for changes in ownership or control of licensed facilities, addition of beds, investment in major capital equipment, introduction of new services or termination of services previously approved through the CON process. CON laws and regulations may restrict an operator’s ability to expand our properties and grow its business in certain circumstances, which could have an adverse effect on the operator’s revenues and, in turn, its ability to make rental payments under and otherwise comply with the terms of our leases. See “Risk Factors-Risks Arising from Our Business-If we must replace any of our tenants or operators, we might be unable to reposition the properties on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could have a Material Adverse Effect on us” included in Part I, Item 1A of this Annual Report on Form 10-K.

State CON laws remained largely unchanged in 2016, with the exceptions of New Hampshire and Tennessee. New Hampshire repealed its CON laws, effective June 30, 2016. Tennessee, on the other hand, deleted or liberalized several services from its CON requirements while adding others. Among the additions to CON requirements, hospitals in Tennessee are now required to obtain a CON when seeking to create a satellite emergency department, as well as prior to starting an organ donation/organ transplant service.

Compared to hospitals and skilled nursing facilities, seniors housing communities (other than those that receive

Medicaid payments) do not receive significant funding from governmental healthcare programs and are subject to relatively few, if any, federal regulations. Instead, to the extent they are regulated, such regulation consists primarily of state and local laws governing licensure, provision of services, staffing requirements and other operational matters, which vary greatly from one jurisdiction to another. Although recent growth in the U.S. seniors housing industry has attracted the attention of various federal agencies that believe more federal regulation of these properties is necessary, Congress thus far has deferred to state regulation of seniors housing communities. However, as a result of this growth and increased federal scrutiny, some states have revised and strengthened their regulation of seniors housing communities, and more states are expected to do the same in the future.

As discussed in greater detail below, a number of states have instituted Medicaid waiver programs that blend the functions of healthcare and custodial care providers, and expand the scope of services that can be provided under certain licenses. The trend toward this kind of experimentation is likely to continue, and even hasten, under current political leadership. The temporary and experimental nature of these programs means that states will also continue to adjust their licensing and certification processes, which may result in some of our operators facing increased competition and others facing new requirements.

Fraud and Abuse Enforcement

Skilled nursing facilities, hospitals and senior housing communities that receive Medicaid payments are subject to various complex federal, state and local laws and regulations that govern healthcare providers' relationships and arrangements and prohibit fraudulent and abusive business practices. These laws and regulations include, among others:


•	Federal and state false claims acts, which, among other things, prohibit healthcare providers from filing false claims or making false statements to receive payment from Medicare, Medicaid or other governmental healthcare programs;


•	Federal and state anti-kickback and fee-splitting statutes, including the Medicare and Medicaid anti-kickback statute, which prohibit the payment, receipt or solicitation of any remuneration to induce referrals of patients for items or services covered by a governmental healthcare program, including Medicare and Medicaid;


•	Federal and state physician self-referral laws, including the federal Stark Law, which generally prohibits physicians from referring patients enrolled in certain governmental healthcare programs to providers of certain designated health services in which the referring physician or an immediate family member of the referring physician has an ownership or other financial interest;


•	The federal Civil Monetary Penalties Law, which authorizes the U.S. Department of Health and Human Services (“HHS”) to impose civil penalties administratively for fraudulent acts; and


•	State and federal data privacy and security laws, including the privacy and security rules of the Health Insurance Portability and Accountability Act of 1996, which provide for the privacy and security of certain individually identifiable health information.

Violating these healthcare fraud and abuse laws and regulations may result in criminal and civil penalties, such as punitive sanctions, damage assessments, monetary penalties, imprisonment, denial of Medicare and Medicaid payments, and exclusion from the Medicare and Medicaid programs. The responsibility for enforcing these laws and regulations lies with a variety or federal, state and local governmental agencies, however they can also be enforced by private litigants through federal and state false claims acts and other laws that allow private individuals to bring whistleblower suits known as qui tam actions.

Congress has significantly increased funding to the governmental agencies charged with enforcing the healthcare fraud and abuse laws to facilitate increased audits, investigations and prosecutions of providers suspected of healthcare fraud. As a result, government investigations and enforcement actions brought against healthcare providers have increased significantly in recent years and are expected to continue. A violation of federal or state anti-fraud and abuse laws or regulations by an operator of our properties could have a material adverse effect on the operator’s liquidity, financial condition or results of operations, which could adversely affect its ability to satisfy its contractual obligations, including making rental payments under and otherwise complying with the terms of our leases.

It is too early to know whether the new presidential administration will expand on these efforts, but it is likely that states will devote additional resources to Medicaid fraud, waste, and abuse initiatives. Medicaid reform plans may include lowering the growth rate of Medicaid spending, which will put pressure on states to exert greater scrutiny over the utilization of services.

Medicare’s fraud, waste, and abuse initiatives will also likely be retooled during the new presidential administration. A backlog of provider appeals in response to Medicare audits may require the Centers for Medicare and Medicaid Services (“CMS”) to consider more expedited and conservative methods for determining recovery amounts. The Recovery Audit Contractor program, which has recovered more than $2 billion for the Medicare program, continues to be controversial and may be modified under the new administration. Finally, the growth of value- based reimbursement models in Medicare may result in new rules regarding physician ownership of other providers, provider referrals, and provider affiliated charities buying down the cost of care for certain consumers. In total, Medicare program integrity might be less of a focus of the new administration, but there will be policy changes and as yet unknown pockets of increased oversight that are expected to create new risks for operators of healthcare facilities.

Reimbursement

The majority of skilled nursing facilities reimbursement, and a significant percentage of hospital reimbursement, is through Medicare and Medicaid. Medical buildings and other healthcare related properties have provider tenants that participate in Medicare and Medicaid. These programs are often their largest source of funding. Seniors housing communities generally do not receive funding from Medicare or Medicaid, but their ability to retain their residents is impacted by policy decisions and initiatives established by the administrators of Medicare and Medicaid. The passage of the ACA in 2010 allowed formerly uninsured Americans to acquire coverage and utilize additional health care services. In addition, the ACA gave the Centers for Medicare and Medicaid Services new authorities to implement Medicaid waiver and pilot programs that impact healthcare and long term custodial care reimbursement by Medicare and Medicaid. These activities promote “aging in place”, allowing senior citizens to stay longer in seniors housing communities, and diverting or delaying their admission into skilled nursing facilities. The potential risks that accompany these regulatory and market changes are discussed below.

•

As a result of the ACA, and specifically Medicaid expansion and establishment of health insurance exchanges providing subsidized health insurance, an estimated seventeen million more Americans have health insurance than in 2010. These newly-insured Americans utilize services delivered by providers at medical buildings and other healthcare facilities. The new presidential administration and Republican-controlled Congress are committed to repealing the ACA and replacing it with a less federalized model for providing health insurance to individuals and families unable to purchase health insurance on their own. The details of the replacement model are not yet known, but potential end results could be fewer insured individuals and families or individuals and families maintaining less comprehensive insurance coverage. Either outcome could adversely impact the resources of our operators.

•

Enabled by the Medicare Modernization Act (2003) and subsequent laws, Medicare and Medicaid have implemented pilot programs (officially termed demonstrations or models) to “divert” elderly from skilled nursing facilitates and promote “aging in place” in “the least restrictive environment.” Several states have implemented home and community-based Medicaid waiver programs that increase the support services available to senior citizens in senior housing, lengthening the time that many seniors can live outside of a skilled nursing facility. These Medicaid waiver programs are subject to re-approval and pilots are time-limited. The new presidential administration may be generally supportive of these programs, but it is nonetheless likely that particular initiatives will gain or lose favor, and certain current initiatives might come to an end or be modified.

•

CMS is currently in the midst of transitioning Medicare from a traditional fee for service reimbursement model to capitated, value-based, and bundled payment approaches in which the government pays a set amount for each beneficiary for a defined period of time, based on that person’s underlying medical needs, rather than the actual services provided. The result is increasing use of management tools to oversee individual providers and coordinate their services. This puts downward pressure on the number and expense of services provided. Roughly eight million Medicare beneficiaries now receive care via accountable care organizations, and another 18 million are enrolled in Medicare Advantage health plans. The continued trend toward capitated, value-based, and bundled payment approaches has the potential diminish the market for certain healthcare providers, particularly specialist physicians and providers of particular diagnostic technologies such medical resonance imaging services. This could adversely impact the medical properties that house these physicians and medical technology providers.

•

The majority of Medicare payments continue to be made through traditional Medicare Part A and Part B fee-for-service schedules. Medicare’s payment regulations, particularly with respect to certain hospitals, skilled nursing care, and home health services have resulted in lower net pay increases than providers of those services often desire. In addition, the Medicare and CHIP Reauthorization Act of 2015 establishes a multi-year transition into pay-for-quality approaches for Medicare physicians and other providers. This will include payment reductions for providers who do not meet government quality standards. The implementation of pay-for-quality models is

expected to produce funding disparities that could adversely impact some provider tenants in medical buildings and other health care properties.

For the year ended December 31, 2016 , approximately 9.2% of our total revenues and 15.0% of our total NOI (in each case excluding amounts in discontinued operations) were attributable to skilled nursing facilities and hospitals in which our third-party tenants receive reimbursement for their services under governmental healthcare programs, such as Medicare and Medicaid. We are neither a participant in, nor a direct recipient of, any reimbursement under these programs with respect to those leased facilities.

Life Science and Innovation Centers

In 2016, we entered the life science and innovation sector (“life science”) through the Life Sciences Acquisition. The life science tenants of these assets are largely university-affiliated organizations. These university-affiliated life science tenants are dependent on government funding to varying degrees. Creating a new pharmaceutical product or medical device requires substantial investments of time and capital, in part because of the extensive regulation of the healthcare industry; it also entails considerable risk of failure in demonstrating that the product is safe and effective and in gaining regulatory approval and market acceptance. Therefore, our tenants in the life science industry face high levels of regulation, expense and uncertainty.

Environmental Regulation

As an owner of real property, we are subject to various federal, state and local laws and regulations regarding environmental, health and safety matters.

These laws and regulations address, among other things, asbestos, polychlorinated biphenyls, fuel oil management, wastewater discharges, air emissions, radioactive materials, medical wastes, and hazardous wastes, and, in certain cases, the costs of complying with these laws and regulations and the penalties for non-compliance can be substantial. With respect to our properties that are operated or managed by third parties, we may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any property from which there is or has been an actual or threatened release of a regulated material and any other affected properties, regardless of whether we knew of or caused the release. Such costs typically are not limited by law or regulation and could exceed the property’s value. In addition, we may be liable for certain other costs, such as governmental fines and injuries to persons, property or natural resources, as a result of any such actual or threatened release. See “Risk Factors-Risks Arising from Our Business-We could incur substantial liabilities and costs if any of our properties are found to be contaminated with hazardous substances or we become involved in any environmental disputes” included in Item 1A of this Annual Report on Form 10-K.

Under the terms of our lease, management and other agreements, we generally have a right to indemnification by the tenants, operators and managers of our properties for any contamination caused by them. However, we cannot assure you that our tenants, operators and managers will have the financial capability or willingness to satisfy their respective indemnification obligations to us, and any failure, inability or unwillingness to do so may require us to satisfy the underlying environmental claims.

In general, we have also agreed to indemnify our tenants and operators against any environmental claims (including penalties and clean-up costs) resulting from any condition arising in, on or under, or relating to, the leased properties at any time before the applicable lease commencement date. With respect to our senior living operating portfolio, we have agreed to indemnify our managers against any environmental claims (including penalties and clean- up costs) resulting from any condition on those properties, unless the manager caused or contributed to that condition.

We did not make any material capital expenditures in connection with environmental, health, and safety laws, ordinances and regulations in 2016 and do not expect that we will be required to make any such material capital expenditures during 2017 .

Canada

In Canada, seniors housing communities are currently generally subject to significantly less regulation than skilled nursing facilities and hospitals, and the regulation of such facilities is principally a matter of provincial and municipal jurisdiction. As a result, the regulatory regimes that apply to seniors housing communities vary depending on the province (and in certain circumstances, the city) in which a facility is located. Recently, certain Canadian provinces have taken steps to implement regulatory measures that could result in enhanced regulation for seniors housing communities in such provinces.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal income tax considerations that may be relevant to you as a holder of our stock. It is not tax advice, nor does it purport to address all aspects of U.S. federal income taxation that may be important to particular stockholders in light of their personal circumstances or to certain types of stockholders, such as insurance companies, tax-exempt organizations (except to the extent discussed below under “Treatment of Tax-Exempt Stockholders”), financial institutions, pass-through entities (or investors in such entities) or broker-dealers, and non-U.S. individuals and entities (except to the extent discussed below under “Special Tax Considerations for Non-U.S. Stockholders”), that may be subject to special rules.

The statements in this section are based on the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury Regulations, Internal Revenue Service (“IRS”) rulings, administrative interpretations and judicial decisions now in effect, all of which are subject to change or different interpretation, possibly with retroactive effect. The laws governing the U.S. federal income tax treatment of REITs and their stockholders are highly technical and complex, and this discussion is qualified in its entirety by the authorities listed above. We cannot assure you that new laws, interpretations of law or court decisions will not cause any statement herein to be inaccurate.

Federal Income Taxation of Ventas

We elected REIT status beginning with the year ended December 31, 1999. We believe that we have satisfied the requirements to qualify as a REIT for federal income tax purposes for all tax years starting in 1999, and we intend to continue to do so. By qualifying for taxation as a REIT, we generally are not subject to federal income tax on net income that we currently distribute to stockholders, which substantially eliminates the “double taxation” (i.e., taxation at both the corporate and stockholder levels) that results from investment in a C corporation (i.e., a corporation generally subject to full corporate-level tax). Our qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Code, which are discussed below, including through actual operating results, asset composition, distribution levels and diversity of stock ownership.

Notwithstanding such qualification, we are subject to federal income tax on any undistributed taxable income, including undistributed net capital gains, at regular corporate rates. In addition, we are subject to a 4% excise tax if we do not satisfy specific REIT distribution requirements. See “Requirements for Qualification as a REIT-Annual Distribution Requirements.” Under certain circumstances, we may be subject to the “alternative minimum tax” on our undistributed items of tax preference. If we have net income from the sale or other disposition of “foreclosure property” (as described below) held primarily for sale to customers in the ordinary course of business or certain other non-qualifying income from foreclosure property, we are subject to tax at the highest corporate rate on that income. See “Requirements for Qualification as a REIT-Foreclosure Property.” In addition, if we have net income from “prohibited transactions” (which are, in general, certain sales or other dispositions of property (other than foreclosure property) held primarily for sale to customers in the ordinary course of business), that income is subject to a 100% tax.

We also may be subject to “Built-in Gains Tax” on any appreciated asset that we own or acquire that was previously owned by a C corporation. If we dispose of any such asset and recognize gain on the disposition during the five-year period immediately after the asset was owned by a C corporation (either prior to our REIT election, or through stock acquisition or merger), then we generally are subject to regular corporate income tax on the gain equal to the lesser of the recognized gain at the time of disposition or the built-in gain in that asset as of the date it became a REIT asset. Certain exceptions may apply if the C corporation makes an election to receive different treatment or if we acquired the asset in an exchange under Section 1031 (a like-kind exchange) or 1033 (an involuntary conversion) of the Code.

If we fail to satisfy either of the gross income tests for qualification as a REIT (as discussed below), but maintain such qualification under the relief provisions of the Code, we will be subject to a 100% tax on the gross income attributable to the amount by which we failed the applicable test, multiplied by a fraction intended to reflect our profitability. In addition, if we violate one or more of the REIT asset tests (as discussed below), we may avoid a loss of our REIT status if we qualify under certain relief provisions and, among other things, pay a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying asset during a specified period. If we fail to satisfy any requirement for REIT qualification, other than the gross income or assets tests mentioned above, but maintain such qualification by meeting certain other requirements, we may be subject to a $50,000 penalty for each failure. Finally, we will incur a 100% excise tax on the income derived from certain transactions with a taxable REIT subsidiary (including rental income derived from leasing properties to a taxable REIT subsidiary) that are not conducted on an arm’s-length basis.

See “Requirements for Qualification as a REIT” below for other circumstances in which we may be required to pay federal taxes.

Requirements for Qualification as a REIT

To qualify as a REIT, we must meet the requirements discussed below relating to our organization, sources of income, nature of assets and distributions of income to our stockholders.

Organizational Requirements

The Code defines a REIT as a corporation, trust or association: (i) that is managed by one or more directors or trustees; (ii) the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest; (iii) that would be taxable as a domestic corporation but for Sections 856 through 859 of the Code; (iv) that is neither a financial institution nor an insurance company subject to certain provisions of the Code; (v) the beneficial ownership of which is held by 100 or more persons during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year (the “100 Shareholder Rule”); (vi) not more than 50% in value of the outstanding stock of which is owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of each taxable year (the “5/50 Rule”); (vii) that makes an election to be a REIT (or has made such election for a prior taxable year) and satisfies all relevant filing and other administrative requirements established by the IRS that must be met in order to elect and to maintain REIT status; (viii) that uses a calendar year for federal income tax purposes; and (ix) that meets certain other tests, described below, regarding the nature of its income and assets and the amount of its distributions.

We believe, but cannot assure you, that we have satisfied and will continue to satisfy the organizational requirements for qualification as a REIT. Although our certificate of incorporation contains certain limits on the ownership of our stock that are intended to prevent us from failing the 5/50 Rule or the 100 Shareholder Rule, we cannot assure you as to the effectiveness of those limits.

To qualify as a REIT, a corporation also may not have (as of the end of the taxable year) any earnings and profits that were accumulated in periods before it elected REIT status or that are from acquired non-REIT corporations. We believe that we have not had any accumulated earnings and profits that are attributable to non-REIT periods or from acquired corporations that were not REITs, although the IRS is entitled to challenge that determination.

Gross Income Tests

We must satisfy two annual gross income requirements to qualify as a REIT:

•

At least 75% of our gross income (excluding gross income from prohibited transactions, certain hedging transactions and certain foreign currency gains) for each taxable year must consist of defined types of income derived directly or indirectly from investments relating to real property or mortgages on real property (including pledges of equity interest in certain entities holding real property and also including “rents from real property” (as defined in the Code)) and, in certain circumstances, interest on certain types of temporary investment income; and


•	At least 95% of our gross income (excluding gross income from prohibited transactions, certain hedging transactions and certain foreign currency gains) for each taxable year must be derived from such real property or temporary investments, dividends, interest and gains from the sale or disposition of stock or securities, or from any combination of the foregoing.

We believe, but cannot assure you, that we have been and will continue to be in compliance with these gross income tests. If we fail to satisfy one or both tests for any taxable year, we nevertheless may qualify as a REIT for that year if we qualify under certain relief provisions of the Code, in which case we would be subject to a 100% tax on the gross income attributable to the amount by which we failed the applicable test, multiplied by a percentage intended to reflect our profitability. If we fail to satisfy one or both tests and do not qualify under the relief provisions for any taxable year, we will not qualify as a REIT for that year, which would have a Material Adverse Effect on us.

Rents we receive from a tenant will qualify as “rents from real property” for the purpose of satisfying the gross income requirements for a REIT described above only if all of the following conditions are met:


•	The amount of rent is not based in whole or in part on the income or profits of any person. However, an amount we receive or accrue generally will not be excluded from the term “rents from real property” solely because it is based on a fixed percentage or percentages of receipts or sales;

•

Neither we nor an actual or constructive owner of 10% or more of our stock actually or constructively owns 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant, subject to limited exceptions for a tenant that is a taxable REIT subsidiary, or “TRS”;


•	Rent attributable to personal property, leased in connection with a lease of real property, is not greater than 15% of the total rent received under the lease. If this condition is not met, then the portion of the rent attributable to personal property will not qualify as “rents from real property”; and


•	We generally may not operate or manage the property or furnish or render services to our tenants, subject to a 1% de minimis exception and certain other exceptions.

Asset Tests

At the close of each quarter of our taxable year, we must satisfy the following tests relating to the nature of our assets:

•

At least 75% of the value of our total assets must be represented by cash or cash items (including certain receivables), government securities, “real estate assets” (including interests in real property and in mortgages on real property and shares in other qualifying REITs) (for taxable years beginning after December 31, 2015, the term “real estate assets” also includes (i) unsecured debt instruments of REITs that are required to file annual and periodic reports with the SEC under the Exchange Act (“Publicly Offered REITs”) (ii) personal property securing a mortgage secured by both real property and personal property if the fair market value of such personal property does not exceed 15% of the combined fair market value of all such personal and real property and (iii) personal property leased in connection with a lease of real property for which the rent attributable to personal property is not greater than 15% of the total rent received under the lease) or, in cases where we raise new capital through stock or long-term (i.e., having a maturity of at least five years) public debt offerings, temporary investments in stock or debt instruments during the one-year period following our receipt of such capital (the “75% asset test”); and

•

Of the investments not meeting the requirements of the 75% asset test, the value of any single issuer’s debt and equity securities that we own (other than our equity interests in any entity classified as a partnership for federal income tax purposes, the stock or debt of a taxable REIT subsidiary or the stock or debt of a qualified REIT subsidiary or other disregarded entity subsidiary) may not exceed 5% of the value of our total assets (the “5% asset test”), and we may not own more than 10% of any single issuer’s outstanding voting securities (the “10% voting securities test”) or more than 10% of the value of any single issuer’s outstanding securities (the “10% value test”), subject to limited “safe harbor” exceptions.


•	No more than 25% (20% for taxable years beginning after December 31, 2017) of the value of our total assets can be represented by securities of taxable REIT subsidiaries (the “25% TRS Test” or after December 31, 2017, the “20% TRS Test”).


•	For taxable years beginning after December 31, 2015, the aggregate value of all unsecured debt instruments of Publicly Offered REITs that we hold may not exceed 25% of the value of our total assets.”

We believe, but cannot assure you, that we have been and will continue to be in compliance with the asset tests described above. If we fail to satisfy one or more asset tests at the end of any quarter, we nevertheless may continue to qualify as a REIT if we satisfied all of the asset tests at the close of the preceding calendar quarter and the discrepancy between the value of our assets and the asset test requirements is due to changes in the market values and not caused in any part by our acquisition of non-qualifying assets.

Furthermore, if we fail to satisfy any of the asset tests at the end of any calendar quarter without curing that failure within 30 days after quarter end, we would fail to qualify as a REIT unless we qualified under certain relief provisions enacted as part of the American Jobs Creation Act of 2004. Under one relief provision, we would continue to qualify as a REIT if our failure to satisfy the 5% asset test, the 10% voting securities test or the 10% value test is due to our ownership of assets having a total value not exceeding the lesser of 1% of our assets at the end of the relevant quarter or $10 million and we disposed of those assets (or otherwise met such asset tests) within six months after the end of the quarter in which the failure was identified. If we fail to satisfy any of the asset tests for a particular quarter but do not qualify under the relief provision described in the preceding sentence, then we would be deemed to have satisfied the relevant asset test if: (i) following identification of the failure, we filed a schedule containing a description of each asset that caused the failure; (ii) the failure was due to reasonable cause and not willful neglect; (iii) we disposed of the non-qualifying asset (or otherwise met the relevant asset test) within six months after the end of the quarter in which the failure was identified; and (iv) we paid a penalty tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying asset during the period beginning on the first date of the failure and ending on the date we disposed of the asset (or otherwise cured the asset test failure). We cannot predict whether in all circumstances we would be entitled to the benefit of these relief provisions, and if we fail to satisfy any of the asset tests and do not qualify for the relief provisions, we will lose our REIT status, which would have a Material Adverse Effect on us.

Foreclosure Property

The foreclosure property rules permit us (by our election) to foreclose or repossess properties without being disqualified as a REIT as a result of receiving income that does not qualify under the gross income tests. However, in such a case, we would be subject to a corporate tax on the net non-qualifying income from “foreclosure property,” and the after-tax amount would increase the dividends we would be required to distribute to stockholders. See “Annual Distribution Requirements”. This corporate tax would not apply to income that qualifies under the REIT 75% income test.

Foreclosure property treatment will end on the first day on which we enter into a lease of the applicable property that will give rise to income that does not constitute “good REIT income” under Section 856(c)(3) of the Code, but will not end if the lease will give rise only to good REIT income. Foreclosure property treatment also will end if any construction takes place on the property (other than completion of a building or other improvement that was more than 10% complete before default became imminent). Foreclosure property treatment (other than for qualified healthcare property) is available for an initial period of three years and may, in certain circumstances, be extended for an additional three years. Foreclosure property treatment for qualified healthcare property is available for an initial period of two years and may, in certain circumstances, be extended for an additional four years.

Taxable REIT Subsidiaries

A TRS is a corporation subject to tax as a regular C corporation. Generally, a TRS can own assets that cannot be owned by a REIT directly and can perform tenant services (excluding the direct or indirect operation or management of a lodging or healthcare facility) that would otherwise disqualify the REIT’s rental income under the gross income tests. Notwithstanding general restrictions on related party rent, a REIT can lease healthcare properties to a TRS if the TRS does not manage or operate the properties and instead engages an eligible independent contractor to manage them. We are permitted to own up to 100% of a TRS, subject to the 25% TRS Test (or 20% TRS Test, as applicable) but the Code imposes certain limits on the ability of the TRS to deduct interest payments made to us. In addition, we are subject to a 100% penalty tax on any excess payments received by us or any excess expenses deducted by the TRS if the economic arrangements between the REIT, the REIT’s tenants and the TRS are not comparable to similar arrangements among unrelated parties.

Annual Distribution Requirements

In order to be taxed as a REIT, we are required to distribute dividends (other than capital gain dividends) to our stockholders in an amount at least equal to the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the net income (after tax), if any, from foreclosure property, minus the sum of certain items of non-cash income. These dividends must be paid in the taxable year to which they relate, but may be paid in the following taxable year if (i) they are declared in October, November or December, payable to stockholders of record on a specified date in one of those months and actually paid during January of such following year or (ii) they are declared before we timely file our tax return for such year and paid on or before the first regular dividend payment after such declaration, and we elect on our federal income tax return for the prior year to have a specified amount of the subsequent dividend treated as paid in the prior year. To the extent we do not distribute all of our net capital gain or at least 90%, but less than 100%, of our REIT taxable income, as adjusted, we will be subject to tax on the undistributed amount at regular capital gains and ordinary corporate tax rates, except to the extent of our net operating loss or capital loss carryforwards. If we pay any

Built-in Gains Taxes, those taxes will be deductible in computing REIT taxable income. Moreover, if we fail to distribute during each calendar year (or, in the case of distributions with declaration and record dates falling in the last three months of the calendar year, by the end of January following such year) at least the sum of 85% of our REIT ordinary income for such year, 95% of our REIT capital gain net income for such year (other than long-term capital gain we elect to retain and treat as having been distributed to stockholders), and any undistributed taxable income from prior periods, we will be subject to a 4% nondeductible excise tax on the excess of such required distribution over the amounts actually distributed.

We believe, but cannot assure you, that we have satisfied the annual distribution requirements for the year of our initial REIT election and each subsequent year through the year ended December 31, 2016 . Although we intend to satisfy the annual distribution requirements to continue to qualify as a REIT for the year ending December 31, 2017 and thereafter, economic, market, legal, tax or other considerations could limit our ability to meet those requirements.

We have net operating loss carryforwards that we may use to reduce our annual distribution requirements. See “ NOTE 13—INCOME TAXES ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Failure to Continue to Qualify

If we fail to satisfy one or more requirements for REIT qualification, other than by violating a gross income or asset test for which relief is available under the circumstances described above, we would retain our REIT qualification if the failure is due to reasonable cause and not willful neglect and if we pay a penalty of $50,000 for each such failure. We cannot predict whether in all circumstances we would be entitled to the benefit of this relief provision.

If our election to be taxed as a REIT is revoked or terminated in any taxable year (e.g., due to a failure to meet the REIT qualification tests without qualifying for any applicable relief provisions), we would be subject to tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates (for all open tax years beginning with the year our REIT election is revoked or terminated), and we would not be required to make distributions to stockholders, nor would we be entitled to deduct any such distributions. All distributions to stockholders (to the extent of our current and accumulated earnings and profits) would be taxable as ordinary income, except to the extent such dividends are eligible for the qualified dividends rate generally available to non-corporate holders, and, subject to certain limitations, corporate stockholders would be eligible for the dividends received deduction. In addition, we would be prohibited from re-electing REIT status for the four taxable years following the year during which we ceased to qualify as a REIT, unless certain relief provisions of the Code applied. We cannot predict whether we would be entitled to such relief.

New Partnership Audit Rules

The recently enacted Bipartisan Budget Act of 2015 changes the rules applicable to U.S. federal income tax audits of partnerships. Under the new rules (which are generally effective for taxable years beginning after December 31, 2017), among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction, or credit of a partnership (and any partner’s distributive share thereof) is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the partnership level. Although it is uncertain how these new rules will be implemented, it is possible that they could result in partnerships in which we directly or indirect invest being required to pay additional taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of these partnerships, could be required to bear the economic burden of those taxes, interest, and penalties even though we, as a REIT, may not otherwise have been required to pay additional corporate-level taxes had we owned the assets of the partnership directly. The changes created by these new rules are sweeping and in many respects dependent on the promulgation of future regulations or other guidance by the U.S. Treasury. You should consult with your tax advisors with respect to these changes and their potential impact on your investment in our common stock.

Federal Income Taxation of U.S. Stockholders

As used in this discussion, the term “U.S. Stockholder” refers to any beneficial owner of our stock that is, for U.S. federal income tax purposes, an individual who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia, an estate the income of which must be included in gross income for U.S. federal income tax purposes regardless of its source, or a trust if (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (ii) the trust has elected under applicable U.S. Treasury Regulations to retain its pre-August 20, 1996 classification as a U.S. person. If an entity treated as a partnership for U.S. federal income tax purposes holds our stock, the tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of

the partnership. Partners in partnerships holding our stock should consult their tax advisors. This section assumes the U.S. Stockholder holds our stock as a capital asset (that is, for investment).

Provided we qualify as a REIT, distributions made to our taxable U.S. Stockholders out of current or accumulated earnings and profits (and not designated as capital gain dividends) generally will be taxable to such U.S. Stockholders as ordinary income and will not be eligible for the qualified dividends rate generally available to non-corporate holders or for the dividends received deduction generally available to corporations. Distributions that are designated as capital gain dividends will be taxed as a long-term capital gain (to the extent such distributions do not exceed our actual net capital gain for the taxable year) without regard to the period for which the stockholder has held our stock. The distributions we designate as capital gain dividends may not exceed our dividends paid for the taxable year, including dividends paid the following year that we treated as paid in the current year. Distributions in excess of current and accumulated earnings and profits will not be taxable to a U.S. Stockholder to the extent they do not exceed the U.S. Stockholder’s adjusted basis of our stock (determined on a share-by-share basis), but rather will reduce the U.S. Stockholder’s adjusted basis of our stock. To the extent that distributions in excess of current and accumulated earnings and profits exceed the U.S. Stockholder’s adjusted basis of our stock, such distributions will be included in income as capital gains and taxable at a rate that will depend on the U.S. Stockholder’s holding period for our stock. Any distribution declared by us and payable to a stockholder of record on a specified date in October, November or December of any year will be treated as both paid by us and received by the stockholder on December 31 of that year, provided that we actually pay the distribution during January of the following calendar year. Distributions of amounts previously subject to corporate-level tax (such as dividends we received from TRSs or other corporations, and income that we retained and paid taxes on) are subject to a 20% maximum rate if certain holding period requirements are met.

We may elect to treat all or a part of our undistributed net capital gain as if it had been distributed to our stockholders. If we so elect, our U.S. Stockholders would be required to include in their income as long-term capital gain their proportionate share of our undistributed net capital gain, as designated by us. Each U.S. Stockholder would be deemed to have paid its proportionate share of the income tax imposed on us with respect to such undistributed net capital gain, and this amount would be credited or refunded to the U.S. Stockholder. In addition, the U.S. Stockholder’s tax basis of our stock would be increased by its proportionate share of undistributed net capital gains included in its income, less its proportionate share of the income tax imposed on us with respect to such gains.

U.S. Stockholders may not include in their individual income tax returns any of our net operating losses or net capital losses. Instead, we may carry over those losses for potential offset against our future income, subject to certain limitations. Taxable distributions from us and gain from the disposition of our stock will not be treated as passive activity income, and, therefore, U.S. Stockholders generally will not be able to apply any “passive activity losses” (such as losses from certain types of limited partnerships in which the U.S. Stockholder is a limited partner) against such income. In addition, taxable distributions from us generally will be treated as investment income for purposes of the investment interest limitations.

We will notify stockholders after the close of our taxable year as to the portions of the distributions attributable to that year that constitute ordinary income, return of capital and capital gain. To the extent that a portion of the distribution is designated as a capital gain dividend, we will notify stockholders as to the portion that is a “20% rate gain distribution” and the portion that is an unrecaptured Section 1250 distribution. A 20% rate gain distribution is a capital gain distribution to U.S. Stockholders that are individuals, estates or trusts that is taxable at a maximum rate of 20%. An unrecaptured Section 1250 gain distribution is taxable to U.S. Stockholders that are individuals, estates or trusts at a maximum rate of 25%.

Taxation of U.S. Stockholders on the Disposition of Shares of Stock

In general, a U.S. Stockholder must treat any gain or loss realized upon a taxable disposition of our stock as long-term capital gain or loss if the U.S. Stockholder has held the stock for more than one year, and otherwise as short-term capital gain or loss. However, a U.S. Stockholder must treat any loss upon a sale or exchange of shares of our stock held for six months or less as a long-term capital loss to the extent of capital gain dividends and any other actual or deemed distributions from us which the U.S. Stockholder treats as long-term capital gain. All or a portion of any loss that a U.S. Stockholder realizes upon a taxable disposition of our stock may be disallowed if the U.S. Stockholder purchases other shares of our stock (or certain options to acquire our stock) within 30 days before or after the disposition.

Medicare Tax on Investment Income

Certain U.S. Stockholders who are individuals, estates or trusts and whose income exceeds certain thresholds are required to pay a 3.8% Medicare tax on dividends and certain other investment income, including capital gains from the sale or other disposition of our stock.

Treatment of Tax-Exempt Stockholders

Tax-exempt organizations, including qualified employee pension and profit sharing trusts and individual retirement accounts (collectively, “Exempt Organizations”), generally are exempt from U.S. federal income taxation but are subject to taxation on their unrelated business taxable income (“UBTI”). While many investments in real estate generate UBTI, a ruling published by the IRS states that dividend distributions by a REIT to an exempt employee pension trust do not constitute UBTI. Based on that ruling, and subject to the exceptions discussed below, amounts distributed by us to Exempt Organizations generally should not constitute UBTI. However, if an Exempt Organization finances its acquisition of our stock with debt, a portion of its income from us will constitute UBTI pursuant to the “debt-financed property” rules. Social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from taxation under paragraphs (7), (9), (17) and (20), respectively, of Section 501(c) of the Code are subject to different UBTI rules, which generally require them to characterize distributions from us as UBTI, and in certain circumstances, a pension trust that owns more than 10% of our stock is required to treat a percentage of the dividends from us as UBTI.

Special Tax Considerations for Non-U.S. Stockholders

As used herein, the term “Non-U.S. Stockholder” refers to any beneficial owner of our stock that is, for U.S. federal income tax purposes, a nonresident alien individual, foreign corporation, foreign estate or foreign trust, but does not include any foreign stockholder whose investment in our stock is “effectively connected” with the conduct of a trade or business in the United States. Such a foreign stockholder, in general, is subject to U.S. federal income tax with respect to its investment in our stock in the same manner as a U.S. Stockholder (subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals), provided that, if required by an applicable income tax treaty, the foreign stockholder maintains a permanent establishment in the United States to which such income is attributable. In addition, a foreign corporation receiving income that is treated as effectively connected with a U.S. trade or business also may be subject to an additional 30% “branch profits tax” on its effectively connected earnings and profits (subject to adjustments) unless an applicable tax treaty provides a lower rate or an exemption. Certain certification requirements must be satisfied in order for effectively connected income to be exempt from withholding.

Distributions to Non-U.S. Stockholders that are not attributable to gain from sales or exchanges by us of U.S. real property interests and are not designated by us as capital gain dividends (or deemed distributions of retained capital gains) are treated as dividends of ordinary income to the extent that they are made out of our current or accumulated earnings and profits. Such distributions ordinarily are subject to a withholding tax equal to 30% of the gross amount of the distribution unless an applicable tax treaty reduces or eliminates that tax. Distributions in excess of our current and accumulated earnings and profits are not taxable to a Non-U.S. Stockholder to the extent that such distributions do not exceed the Non-U.S. Stockholder’s adjusted basis of our stock (determined on a share-by-share basis), but rather reduce the Non-U.S. Stockholder’s adjusted basis of our stock. To the extent that distributions in excess of current and accumulated earnings and profits exceed the Non-U.S. Stockholder’s adjusted basis of our stock, such distributions will give rise to tax liability if the Non-U.S. Stockholder would otherwise be subject to tax on any gain from the sale or disposition of our stock, as described below.

We expect to withhold U.S. tax at the rate of 30% on the gross amount of any dividends, other than dividends treated as attributable to gain from sales or exchanges of U.S. real property interests and capital gain dividends, paid to a Non-U.S. Stockholder, unless (i) a lower treaty rate applies and the required IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable documentation) evidencing eligibility for that reduced rate is filed with us or the appropriate withholding agent or (ii) the Non-U.S. Stockholder files an IRS Form W-8ECI or a successor form with us or the appropriate withholding agent properly claiming that the distributions are effectively connected with the Non-U.S. Stockholder’s conduct of a U.S. trade or business.

For any year in which we qualify as a REIT, distributions to a Non-U.S. Stockholder that owns more than 10% of our shares (assuming our shares are regularly traded on an established securities market located in the United States) at any time during the one-year period ending on the date of distribution and that are attributable to gain from sales or exchanges by us of U.S. real property interests will be taxed to the Non-U.S. Stockholder under the provisions of the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) as if such gain were effectively connected with a U.S. business. Accordingly, a Non-U.S. Stockholder that owns more than 10% of our shares (assuming our shares are regularly traded on an established securities market located in the United States) will be taxed at the normal capital gain rates applicable to a U.S. Stockholder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals) and would be required to file a U.S. federal income tax return. Distributions subject to FIRPTA also may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits (subject to adjustments) if the recipient is a corporate Non-U.S. Stockholder not entitled to treaty relief or exemption. Under FIRPTA, we are required to withhold 35% (which is higher than the maximum rate on long-term capital gains of non-corporate persons) of any distribution to a Non-U.S.

Stockholder that owns more than 10% of our shares which is or could be designated as a capital gain dividend attributable to U.S. real property interests. Moreover, if we designate previously made distributions as capital gain dividends attributable to U.S. real property interests, subsequent distributions (up to the amount of such prior distributions) will be treated as capital gain dividends subject to FIRPTA withholding. This amount is creditable against the Non-U.S. Stockholder’s FIRPTA tax liability.

Distributions by us to a “qualified foreign pension fund,” within the meaning of Section 897(l) of the Code (“Qualified Foreign Pension Fund”), or any entity all of the interests of which are held by a Qualified Foreign Pension Fund, is exempt from FIRPTA, but may nonetheless be subject to U.S. federal dividend withholding tax unless an applicable tax treaty or Section 892 of the Code provides an exemption from such dividend withholding tax. Non-U.S. Stockholders who are Qualified Foreign Pension Funds should consult their tax advisors regarding the application of these rules.

If a Non-U.S. Stockholder does not own more than 10% of our shares at any time during the one-year period ending on the date of a distribution (assuming our shares are regularly traded on an established securities market located in the United States), any capital gain distributions, to the extent attributable to sales or exchanges by us of U.S. real property interests, will not be considered to be effectively connected with a U.S. business, and the Non-U.S. Stockholder would not be required to file a U.S. federal income tax return solely as a result of receiving such a distribution. In that case, the distribution will be treated as an ordinary dividend to that Non-U.S. Stockholder and taxed as an ordinary dividend that is not a capital gain distribution (and subject to withholding), as described above. In addition, the branch profits tax will not apply to the distribution. Any capital gain distribution, to the extent not attributable to sales or exchanges by us of U.S. real property interests, generally will not be subject to U.S. federal income taxation (regardless of the amount of our shares owned by a Non-U.S. Stockholder).

For so long as our stock continues to be regularly traded on an established securities market, the sale of such stock by any Non-U.S. Stockholder who is not a Ten Percent Non-U.S. Stockholder (as defined below) generally will not be subject to U.S. federal income tax (unless the Non-U.S. Stockholder is a nonresident alien individual who was present in the United States for more than 182 days during the taxable year of the sale and certain other conditions apply, in which case such gain (net of certain sources within the U.S., if any) will be subject to a 30% tax on a gross basis). A “Ten Percent Non-U.S. Stockholder” is a Non-U.S. Stockholder who, at some time during the five-year period preceding such sale or disposition, beneficially owned (including under certain attribution rules) more than 10% of the total fair market value of our stock (as outstanding from time to time).

In general, the sale or other taxable disposition of our stock by a Ten Percent Non-U.S. Stockholder also will not be subject to U.S. federal income tax if we are a “domestically controlled qualified investment entity.” A REIT is a “domestically controlled qualified investment entity” if, at all times during the five-year period preceding the disposition in question, less than 50% in value of its shares is held directly or indirectly by non-U.S. persons. For purposes of determining whether a REIT is a domestically controlled qualified investment entity, certain special rules apply including the rule that a person who at all applicable times holds less than 5 percent of a class of stock that is “regularly traded” is treated as a U.S. person unless the REIT has actual knowledge that such person is not a U.S. person. Because our common stock is publicly traded, we believe, but cannot assure you, that we currently qualify as a domestically controlled qualified investment entity, nor can we assure you that we will so qualify at any time in the future. If we do not constitute a domestically controlled qualified investment entity, a Ten Percent Non-U.S. Stockholder generally will be taxed in the same manner as a U.S. Stockholder with respect to gain on the sale of our stock (subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). The sale or other taxable disposition of our stock by a Qualified Foreign Pension Fund, or any entity all of the interests of which are held by a Qualified Foreign Pension Fund, is exempt from U.S. tax irrespective of the level of its shareholding in us and of whether we are a domestically controlled qualified investment entity.

Special rules apply to certain collective investment funds that are “qualified shareholders” as defined in Section 897(k)(3) of the Code of a REIT. Such investors, which include publicly traded vehicles that meet certain requirements, should consult with their own tax advisors prior to making an investment in our shares.

Additional Withholding Tax on Payments Made to Foreign Accounts

A 30% withholding tax will currently be imposed on dividends paid on our stock and will be imposed on gross proceeds from a sale or redemption of our stock paid after December 31, 2018 to (i) foreign financial institutions including non-U.S. investment funds, unless they agree to collect and disclose to the IRS information regarding their direct and indirect U.S. account holders and (ii) certain other foreign entities, unless they certify certain information regarding their direct and indirect U.S. owners. To avoid withholding, foreign financial institutions will need to (i) enter into agreements with the IRS that state that they will provide the IRS information, including the names, addresses and taxpayer identification numbers of direct and indirect U.S. account holders, comply with due diligence procedures with respect to the identification of U.S. accounts, report

to the IRS certain information with respect to U.S. accounts maintained, agree to withhold tax on certain payments made to non-compliant foreign financial institutions or to account holders who fail to provide the required information, and determine certain other information as to their account holders, or (ii) in the event that an applicable intergovernmental agreement and implementing legislation are adopted, provide local revenue authorities with similar account holder information or otherwise comply with the terms of the intergovernmental agreement and implementing legislation. Other foreign entities will need to either provide the name, address, and taxpayer identification number of each substantial U.S. owner or certifications of no substantial U.S. ownership unless certain exceptions apply or agree to provide certain information to other revenue authorities for transmittal to the IRS.

Information Reporting Requirements and Backup Withholding

Information returns may be filed with the IRS and backup withholding (at a rate of 28%) may be collected in connection with distributions paid or required to be treated as paid during each calendar year and payments of the proceeds of a sale or other disposition of our stock by a stockholder. A U.S. Stockholder will not be subject to backup withholding if such stockholder is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact or provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. A stockholder who does not provide us with its correct taxpayer identification number also may be subject to penalties imposed by the IRS.

Payments of dividends on our common stock to Non-U.S. Stockholders generally will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the stockholder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Stockholder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of such stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such stockholder is a United States person, or the stockholder otherwise establishes an exemption. Proceeds of a disposition of such stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting. Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Stockholder resides or is established.

Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be offset by the amount of tax withheld. If backup withholding results in an overpayment of U.S. federal income taxes, a refund or credit may be obtained from the IRS, provided the required information is furnished timely thereto.

Other Tax Consequences

State and Local Taxes

We and our stockholders may be subject to taxation by various states and localities, including those in which we or a stockholder transact business, own property or reside. State and local tax treatment may differ from the U.S. federal income tax treatment described above. Consequently, stockholders should consult their own tax advisers regarding the effect of state and local tax laws, in addition to federal, foreign and other tax laws, in connection with an investment in our stock.

Possible Legislative or Other Actions Affecting Tax Consequences

You should recognize that future legislative, judicial and administrative actions or decisions, which may be retroactive in effect, could adversely affect our federal income tax treatment or the tax consequences of an investment in shares of our stock. The rules dealing with U.S. federal income taxation are continually under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department, resulting in statutory changes as well as promulgation of new, or revisions to existing, regulations and revised interpretations of established concepts. We cannot predict the likelihood of passage of any new tax legislation or other provisions, either directly or indirectly, affecting us or our stockholders or the value of an investment in our stock. Changes to the tax laws, such as the Protecting Americans From Tax Hikes Act of 2015 enacted on December 18, 2015 or the Bipartisan Budget Act of 2015 enacted on November 2, 2015, or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect us or our stockholders.

ITEM 1A. Risk Factors

This section discusses the most significant factors that affect our business, operations and financial condition. It does not describe all risks and uncertainties applicable to us, our industry or ownership of our securities. If any of the following risks, or any other risks and uncertainties that are not addressed below or that we have not yet identified, actually occur, we could be materially adversely affected and the value of our securities could decline.

We have grouped these risk factors into three general categories:


•	Risks arising from our business;


•	Risks arising from our capital structure; and


•	Risks arising from our status as a REIT.

Risks Arising from Our Business

The properties managed by Atria and Sunrise account for a significant portion of our revenues and operating income; adverse developments in Atria’s or Sunrise’s business and affairs or financial condition could have a Material Adverse Effect on us.

As of December 31, 2016 , Atria and Sunrise, collectively, managed 266 of our seniors housing communities pursuant to long-term management agreements. These properties represent a substantial portion of our portfolio, based on their gross book value, and account for a significant portion of our revenues and NOI. Although we have various rights as the property owner under our management agreements, we rely on Atria’s and Sunrise’s personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on Atria and Sunrise to set appropriate resident fees, to provide accurate property-level financial results for our properties in a timely manner and to otherwise operate our seniors housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. For example, we depend on Atria’s and Sunrise’s ability to attract and retain skilled management personnel who are responsible for the day-to-day operations of our seniors housing communities. A shortage of nurses or other trained personnel or general inflationary pressures may force Atria or Sunrise to enhance its pay and benefits package to compete effectively for such personnel, but it may not be able to offset these added costs by increasing the rates charged to residents. Any increase in labor costs and other property operating expenses, any failure by Atria or Sunrise to attract and retain qualified personnel, or significant changes in Atria’s or Sunrise’s senior management or equity ownership could adversely affect the income we receive from our seniors housing communities and have a Material Adverse Effect on us.

Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants. However, any adverse developments in Atria’s or Sunrise’s business and affairs or financial condition could impair its ability to manage our properties efficiently and effectively and could have a Material Adverse Effect on us. If Atria or Sunrise experiences any significant financial, legal, accounting or regulatory difficulties due to a weak economy or otherwise, such difficulties could result in, among other adverse events, acceleration of its indebtedness, impairment of its continued access to capital, the enforcement of default remedies by its counterparties, or the commencement of insolvency proceedings by or against it under the U.S. Bankruptcy Code, any one or a combination of which indirectly could have a Material Adverse Effect on us.

Our leases and other agreements with Brookdale Senior Living, Kindred and Ardent account for a significant portion of our revenues and operating income; any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to satisfy its obligations under our agreements could have a Material Adverse Effect on us.

The properties we lease and loans we make to Brookdale Senior Living, Kindred and Ardent account for a significant portion of our revenues and NOI, and we depend on Brookdale Senior Living, Kindred and Ardent to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties and properties that are collateral for the loans. We cannot assure you that Brookdale Senior Living, Kindred and Ardent will have sufficient assets, income and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to do so could have a Material Adverse Effect on us. In addition, any failure by Brookdale Senior Living, Kindred or Ardent to effectively conduct its operations or to maintain and improve such properties could adversely affect its business reputation and its ability to attract and retain patients and residents in such properties, which could have a Material Adverse Effect on us. Brookdale Senior Living, Kindred and Ardent have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses, and we cannot assure you that Brookdale Senior Living, Kindred and Ardent will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy their respective indemnification obligations.

We face potential adverse consequences of bankruptcy or insolvency by our tenants, operators, borrowers, managers and other obligors.

We are exposed to the risk that our tenants, operators, borrowers, managers or other obligors may become bankrupt or insolvent. Although our lease, loan and management agreements give us the right to exercise certain remedies in the event of default on the obligations owing to us or upon the occurrence of certain insolvency events, federal laws afford certain rights to a party that has filed for bankruptcy or reorganization. For example, a debtor-lessee may reject our lease in a bankruptcy proceeding, in which case our claim against the debtor-lessee for unpaid and future rents would be limited by the statutory cap of the U.S. Bankruptcy Code. This statutory cap could be substantially less than the remaining rent actually owed under the lease, and any claim we have for unpaid rent might not be paid in full. In addition, a debtor-lessee may assert in a bankruptcy proceeding that our lease should be re-characterized as a financing agreement, in which case our rights and remedies as a lender, compared to a landlord, generally would be more limited. If a debtor-manager seeks bankruptcy protection, the automatic stay provisions of the U.S. Bankruptcy Code would preclude us from enforcing our remedies against the manager unless relief is first obtained from the court having jurisdiction over the bankruptcy case. In any of these events, we also may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs and maintenance expenses) to preserve the value of our properties, avoid the imposition of liens on our properties or transition our properties to a new tenant, operator or manager.

We have rights to terminate our management agreements with Atria and Sunrise in whole or with respect to specific properties under certain circumstances, and we may be unable to replace Atria or Sunrise if our management agreements are terminated or not renewed.

We are parties to long-term management agreements pursuant to which Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 266 of our seniors housing communities as of December 31, 2016 . Most of our management agreements with Atria have terms expiring either July 31, 2024 or December 31, 2027, with successive automatic ten-year renewal periods, and our management agreements with Sunrise have terms ranging from 25 to 30 years (which commenced as early as 2004 and as recently as 2012). Our ability to terminate these long-term management agreements is limited to specific circumstances set forth in the agreements and may relate to all properties or a specific property or group of properties.

We may terminate any of our Atria management agreements upon the occurrence of an event of default by Atria in the performance of a material covenant or term thereof (including, in certain circumstances, the revocation of any license or certificate necessary for operation), subject in most cases to Atria’s right to cure such default, or upon the occurrence of certain insolvency events relating to Atria. In addition, we may terminate our management agreements with Atria based on the failure to achieve certain NOI targets or upon the payment of a fee.

Similarly, we may terminate any of our Sunrise management agreements upon the occurrence of an event of default by Sunrise in the performance of a material covenant or term thereof (including, in certain circumstances, the revocation of any license or certificate necessary for operation), subject in most cases to Sunrise’s right to cure such default, or upon the occurrence of certain insolvency events relating to Sunrise. We also may terminate most of our management agreements with Sunrise based on the failure to achieve certain NOI targets or to comply with certain expense control covenants, subject to certain rights of Sunrise to make cure payments to us, and upon the occurrence of certain other events or the existence of certain other conditions.

We continually monitor and assess our contractual rights and remedies under our management agreements with Atria and Sunrise. When determining whether to pursue any existing or future rights or remedies under those agreements, including termination rights, we consider numerous factors, including legal, contractual, regulatory, business and other relevant considerations. In the event that we exercise our rights to terminate the Atria or Sunrise management agreements for any reason or such agreements are not renewed upon expiration of their terms, we would attempt to reposition the affected properties with another manager. Although we believe that many qualified national and regional seniors housing operators would be interested in managing our seniors housing communities, we cannot assure you that we would be able to locate another suitable manager or, if we are successful in locating such a manager, that it would manage the properties effectively. Moreover, the transition to a replacement manager would require approval by the applicable regulatory authorities and, in most cases, the mortgage lenders for the properties, and we cannot assure you that such approvals would be granted on a timely basis, if at all. Any inability to replace, or a lengthy delay in replacing, Atria or Sunrise as the manager of our seniors housing communities following termination or non-renewal of the applicable management agreements could have a Material Adverse Effect on us.

If we must replace any of our tenants or operators, we might be unable to reposition the properties on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could have a Material Adverse Effect on us.

We cannot predict whether our tenants will renew existing leases beyond their current term. If our leases with Brookdale Senior Living or Ardent, the Kindred master leases or any of our other triple-net leases are not renewed, we would attempt to reposition those properties with another tenant or operator. In case of non-renewal, we generally have one year prior to expiration of the lease term to arrange for repositioning of the properties and our tenants are required to continue to perform all of their obligations (including the payment of all rental amounts) for the non-renewed assets until such expiration. However, following expiration of a lease term or if we exercise our right to replace a tenant or operator in default, rental payments on the related properties could decline or cease altogether while we reposition the properties with a suitable replacement tenant or operator. We also might not be successful in identifying suitable replacements or entering into leases or other arrangements with new tenants or operators on a timely basis or on terms as favorable to us as our current leases, if at all, and we may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs and maintenance expenses) to preserve the value of, and avoid the imposition of liens on, our properties while they are being repositioned. In addition, we may incur certain obligations and liabilities, including obligations to indemnify the replacement tenant or operator, which could have a Material Adverse Effect on us.

In the event of non-renewal or a tenant default, our ability to reposition our properties with a suitable replacement tenant or operator could be significantly delayed or limited by state licensing, receivership, CON or other laws, as well as by the Medicare and Medicaid change-of-ownership rules, and we could incur substantial additional expenses in connection with any licensing, receivership or change-of-ownership proceedings. Our ability to locate and attract suitable replacement tenants also could be impaired by the specialized healthcare uses or contractual restrictions on use of the properties, and we may be forced to spend substantial amounts to adapt the properties to other uses. Any such delays, limitations and expenses could adversely impact our ability to collect rent, obtain possession of leased properties or otherwise exercise remedies for tenant default and could have a Material Adverse Effect on us.

Moreover, in connection with certain of our properties, we have entered into intercreditor agreements with the tenants’ lenders or tri-party agreements with our lenders. Our ability to exercise remedies under the applicable leases or management agreements or to reposition the applicable properties may be significantly delayed or limited by the terms of the intercreditor agreement or tri-party agreement. Any such delay or limit on our rights and remedies could adversely affect our ability to mitigate our losses and could have a Material Adverse Effect on us.

Merger and acquisition activity or consolidation in the seniors housing and healthcare industries resulting in a change of control of, or a competitor’s investment in, one or more of our tenants, operators or managers could have a Material Adverse Effect on us.

The seniors housing and healthcare industries have recently experienced increased consolidation, including among owners of real estate and care providers. We compete with other healthcare REITs, healthcare providers, healthcare lenders, real estate partnerships, banks, insurance companies, private equity firms and other investors that pursue a variety of investments, which may include investments in our tenants, operators or managers. A competitor’s investment in one of our tenants, operators or managers could enable our competitor to influence that tenant’s, operator’s or manager’s business and strategy in a manner that impairs our relationship with the tenant, operator or manager or is otherwise adverse to our interests. Depending on our contractual agreements and the specific facts and circumstances, we may have the right to consent to, or otherwise exercise rights and remedies, including termination rights, on account of, a competitor’s investment in, a change of control of, or other transactions impacting a tenant, operator or manager. In deciding whether to exercise our rights and remedies, including termination rights, we assess numerous factors, including legal, contractual, regulatory, business and other relevant considerations. In addition, in connection with any change of control of a tenant, operator or manager, the tenant’s, operator’s or manager’s management team may change, which could lead to a change in the tenant’s, operator’s or manager’s strategy or adversely affect the business of the tenant, operator or manager, either of which could have a Material Adverse Effect on us.

Market conditions, including, but not limited to, interest rates and credit spreads, the availability of credit and the actual and perceived state of the real estate markets and public capital markets generally could negatively impact our business, results of operations, and financial condition.

The markets in which we operate are affected by a number of factors that are largely beyond our control but may nevertheless have a significant negative impact on us. These factors include, but are not limited to:


•	Interest rates and credit spreads;


•	The availability of credit, including the price, terms and conditions under which it can be obtained; and


•	The actual and perceived state of the real estate market, the market for dividend-paying stocks and public capital markets in general.

In addition, increased inflation may have a pronounced negative impact on the interest expense we pay in connection with our outstanding indebtedness and our general and administrative expenses, as these costs could increase at a rate higher than our rents.

Deflation may result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand. Restricted lending practices may impact our ability to obtain financing for our properties, which could adversely impact our growth and profitability.

Our ongoing strategy depends, in part, upon future investments in and acquisitions of, or our development or redevelopment of, seniors housing and healthcare assets, and we may not be successful in identifying and consummating these transactions.

An important part of our business strategy is to continue to expand and diversify our portfolio through accretive acquisition, investment, development and redevelopment opportunities in domestic and international seniors housing and healthcare properties. Our execution of this strategy by successfully identifying, securing and consummating beneficial transactions is made more challenging by increased competition and can be affected by many factors, including our relationships with current and prospective clients, our ability to obtain debt and equity capital at costs comparable to or better than our competitors and lower than the yield we earn on our acquisitions or investments, and our ability to negotiate favorable terms with property owners seeking to sell and other contractual counterparties. Our competitors for these opportunities include other healthcare REITs, real estate partnerships, healthcare providers, healthcare lenders and other investors, including developers, banks, insurance companies, pension funds, government-sponsored entities and private equity firms, some of whom may have greater financial resources and lower costs of capital than we do. See “Business—Competition” included in Item 1 of this Annual Report on Form 10-K. If we are unsuccessful at identifying and capitalizing on investment, acquisition, development and redevelopment opportunities, our growth and profitability may be adversely affected.

Investments in and acquisitions of seniors housing and healthcare properties entail risks associated with real estate investments generally, including risks that the investment will not achieve expected returns, that the cost estimates for necessary property improvements will prove inaccurate or that the tenant, operator or manager will fail to meet performance expectations. Investments outside the United States raise legal, economic and market risks associated with doing business in foreign countries, such as currency exchange fluctuations, costly regulatory requirements and foreign tax risks. Domestic and international real estate development and redevelopment projects present additional risks, including construction delays or cost overruns that increase expenses, the inability to obtain required zoning, occupancy and other governmental approvals and permits on a timely basis, and the incurrence of significant costs prior to completion of the project. Furthermore, healthcare properties are often highly customized and the development or redevelopment of such properties may require costly tenant-specific improvements. As a result, we cannot assure you that we will achieve the economic benefit we expect from acquisition, investment, development and redevelopment opportunities.

Our significant acquisition and investment activity presents certain risks to our business and operations.

We have made and expect to continue to make significant acquisitions and investments as part of our overall business strategy. Our significant acquisition and investment activity presents certain risks to our business and operations, including, among other things, that:


•	We may be unable to successfully integrate the operations, personnel or systems of acquired companies, maintain consistent standards, controls, policies and procedures, or realize the anticipated benefits of acquisitions and other investments within the anticipated time frame or at all;


•	We may be unable to effectively monitor and manage our expanded portfolio of properties, retain key employees or attract highly qualified new employees;


•	Projections of estimated future revenues, costs savings or operating metrics that we develop during the due diligence and integration planning process might be inaccurate;


•	Our leverage could increase or our per share financial results could decline if we incur additional debt or issue equity securities to finance acquisitions and investments;


•	Acquisitions and other new investments could divert management’s attention from our existing assets;


•	The value of acquired assets or the market price of our common stock may decline; and


•	We may be unable to continue paying dividends at the current rate.

We cannot assure you that we will be able to integrate acquisitions and investments without encountering difficulties or that any such difficulties will not have a Material Adverse Effect on us.

If the liabilities we assume in connection with acquisitions, including indemnification obligations in favor of third parties, are greater than expected, or if there are unknown liabilities, our business could be materially and adversely affected.

We may assume or incur liabilities in connection with our acquisitions, including, in some cases, contingent liabilities. As we integrate these acquisitions, we may learn additional information about the sellers, the properties, their operations and their liabilities that adversely affects us, such as:


•	Liabilities relating to the clean-up or remediation of undisclosed environmental conditions;


•	Unasserted claims of vendors or other persons dealing with the sellers;


•	Liabilities, claims and litigation, including indemnification obligations, whether or not incurred in the ordinary course of business, relating to periods prior to or following our acquisition;


•	Claims for indemnification by general partners, directors, officers and others indemnified by the sellers; and


•	Liabilities for taxes relating to periods prior to our acquisition.

As a result, we cannot assure you that our past or future acquisitions will be successful or will not, in fact, harm our business. Among other things, if the liabilities we assume in connection with acquisitions are greater than expected, or if we discover obligations relating to the acquired properties or businesses of which we were not aware at the time of acquisition, our business and results of operations could be materially adversely affected.

In addition, we have now, and may have in the future, certain surviving indemnification obligations in favor of third parties under the terms of acquisition agreements to which we are a party. Most of these indemnification obligations will be capped as to amount and survival period, and we do not believe that these obligations will be material in the aggregate. However, there can be no assurances as to the ultimate amount of such obligations or whether such obligations will have a Material Adverse Effect on us.

Our future results will suffer if we do not effectively manage the expansion of our hospital and life science portfolios and operations following the acquisition of AHS and the Life Sciences Acquisition.

As a result of our acquisition of AHS in 2015, we entered into the general acute care hospital sector. Also, as a result of the Life Sciences Acquisition in 2016, we entered into the university-affiliated life science sector. Part of our long-term business strategy involves expanding our hospital and life science portfolios through additional acquisitions. Both the asset management of our existing general acute care hospital and university-affiliated life science portfolios and such additional acquisitions may involve complex challenges. Our future success will depend, in part, upon our ability to manage our expansion opportunities, integrate new investments into our existing business in an efficient and timely manner, successfully monitor the operations, costs, regulatory compliance and service quality of our operators and leverage our relationships with Ardent and other operators of hospitals and Wexford and other operators and developers of life science properties. It is possible that our expansion or acquisition opportunities within the general acute care hospital and life science sectors will not be successful, which could adversely impact our growth and future results.

Our investments are concentrated in seniors housing and healthcare real estate, making us more vulnerable economically to adverse changes in the real estate market and the seniors housing and healthcare industries than if our investments were diversified.

We invest primarily in seniors housing and healthcare properties and are constrained by the terms of our existing indebtedness from making investments outside those industries. This investment focus exposes us to greater economic risk than if our portfolio were to include real estate assets in other industries or assets unrelated to real estate.

The healthcare industry is highly regulated, and changes in government regulation and reimbursement can have material adverse consequences on its participants, some of which may be unintended. The healthcare industry is also highly competitive, and our operators and managers may encounter increased competition for residents and patients, including with respect to the scope and quality of care and services provided, reputation and financial condition, physical appearance of the properties, price and location. Our tenants, operators and managers are large employers who compete for labor, making their results sensitive to changes in the labor market and/or wages and benefits offered to their employees. If our tenants, operators and managers are unable to successfully compete with other operators and managers by maintaining profitable occupancy and rate levels or controlling labor costs, their ability to meet their respective obligations to us may be materially adversely affected. We cannot assure you that future changes in government regulation will not adversely affect the healthcare industry, including our seniors housing and healthcare operations, tenants and operators, nor can we be certain that our tenants, operators and managers will achieve and maintain occupancy and rate levels or labor costs levels that will enable them to satisfy their obligations to us. Any adverse changes in the regulation of the healthcare industry, or the competitiveness of our tenants,

operators and managers, or costs of labor, could have a more pronounced effect on us than if we had investments outside the seniors housing and healthcare industries.

Real estate investments are relatively illiquid, and our ability to quickly sell or exchange our properties in response to changes in economic or other conditions is limited. In the event we market any of our properties for sale, the value of those properties and our ability to sell at prices or on terms acceptable to us could be adversely affected by a downturn in the real estate industry or any economic weakness in the seniors housing and healthcare industries. In addition, transfers of healthcare properties may be subject to regulatory approvals that are not required for transfers of other types of commercial properties. We cannot assure you that we will recognize the full value of any property that we sell for liquidity or other reasons, and the inability to respond quickly to changes in the performance of our investments could adversely affect our business, results of operations and financial condition.

Our operating assets expose us to various operational risks, liabilities and claims that could adversely affect our ability to generate revenues or increase our costs and could have a Material Adverse Effect on us.

Our senior living operating assets and office assets expose us to various operational risks, liabilities and claims that could increase our costs or adversely affect our ability to generate revenues, thereby reducing our profitability. These operational risks include fluctuations in occupancy levels, the inability to achieve economic resident fees (including anticipated increases in those fees), increases in the cost of food, materials, energy, labor (as a result of unionization or otherwise) or other services, rent control regulations, national and regional economic conditions, the imposition of new or increased taxes, capital expenditure requirements, professional and general liability claims, and the availability and cost of professional and general liability insurance. Any one or a combination of these factors could result in operating deficiencies in our senior living operations or office operations reportable business segments, which could have a Material Adverse Effect on us.

Our ownership of properties outside the United States exposes us to different risks than those associated with our domestic properties.

Our current or future ownership of properties outside the United States subjects us to risks that may be different or greater than those we face with our domestic properties. These risks include, but are not limited to:


•	Challenges with respect to repatriation of foreign earnings and cash;


•	Foreign ownership restrictions with respect to operations in countries in which we own properties;


•	Regional or country-specific business cycles and economic instability;


•	Challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment and legal proceedings;


•	Differences in lending practices and the willingness of domestic or foreign lenders to provide financing; and


•	Failure to comply with applicable laws and regulations in the United States that affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act.

Increased construction and development in the markets in which our seniors housing communities and MOBs are located could adversely affect our future occupancy rates, operating margins and profitability.

Limited barriers to entry in the seniors housing and MOB industries could lead to the development of new seniors housing communities or MOBs that outpaces demand. In particular, data published by the National Investment Center for Seniors Housing & Care has indicated that seniors housing construction starts have been increasing and deliveries on seniors housing communities will accelerate in 2017, especially in certain geographic markets. If development outpaces demand for those assets in the markets in which our properties are located, those markets may become saturated and we could experience decreased occupancy, reduced operating margins and lower profitability, which could have a Material Adverse Effect on us.

We have now, and may have in the future, exposure to contingent rent escalators, which could hinder our growth and profitability.

We derive a significant portion of our revenues from leasing properties pursuant to long-term triple-net leases that generally provide for fixed rental rates, subject to annual escalations. In certain cases, the annual escalations are contingent upon the achievement of specified revenue parameters or based on changes in CPI, with caps and floors. If, as a result of weak economic conditions or other factors, the properties subject to these leases do not generate sufficient revenue to achieve the specified rent escalation parameters or CPI does not increase, our growth and profitability may be hindered. If strong economic conditions result in significant increases in CPI, but the escalations under our leases are capped, our growth and profitability also may be limited.

We own certain properties subject to ground lease, air rights or other restrictive agreements that limit our uses of the properties, restrict our ability to sell or otherwise transfer the properties and expose us to loss of the properties if such agreements are breached by us or terminated.

Our investments in MOBs and other properties may be made through leasehold interests in the land on which the buildings are located, leases of air rights for the space above the land on which the buildings are located, or other similar restrictive arrangements. Many of these ground lease, air rights and other restrictive agreements impose significant limitations on our uses of the subject properties, restrict our ability to sell or otherwise transfer our interests in the properties or restrict the leasing of the properties. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to find suitable tenants for the properties. In addition, we could lose our interests in the subject properties if the ground lease, air rights or other restrictive agreements are breached by us or terminated.

We may be unable to successfully foreclose on the collateral securing our loans and other investments, and even if we are successful in our foreclosure efforts, we may be unable to successfully sell any acquired equity interests or reposition any acquired properties, which could adversely affect our ability to recover our investments.

If a borrower defaults under mortgage or other secured loans for which we are the lender, we may attempt to foreclose on the collateral securing those loans, including by acquiring any pledged equity interests or acquiring title to the subject properties, to protect our investment. In response, the defaulting borrower may contest our enforcement of foreclosure or other available remedies, seek bankruptcy protection against our exercise of enforcement or other available remedies, or bring claims against us for lender liability. If a defaulting borrower seeks bankruptcy protection, the automatic stay provisions of the U.S. Bankruptcy Code would preclude us from enforcing foreclosure or other available remedies against the borrower unless relief is first obtained from the court with jurisdiction over the bankruptcy case. In addition, we may be subject to intercreditor or tri-party agreements that delay, impact, govern or limit our ability to foreclose on a lien securing a loan or otherwise delay or limit our pursuit of our rights and remedies. Any such delay or limit on our ability to pursue our rights or remedies could have a Material Adverse Effect on us.

Even if we successfully foreclose on the collateral securing our mortgage loans and other investments, costs related to enforcement of our remedies, high loan-to-value ratios or declines in the value of the collateral could prevent us from realizing the full amount of our secured loans, and we could be required to record a valuation allowance for such losses. Moreover, the collateral may include equity interests that we are unable to sell due to securities law restrictions or otherwise, or properties that we are unable to reposition with new tenants or operators on a timely basis, if at all, or without making improvements or repairs. Any delay or costs incurred in selling or repositioning acquired collateral could adversely affect our ability to recover our investments.

Some of our loan investments are subordinated to loans held by third parties.

Our mezzanine loan investments are subordinated to senior secured loans held by other investors that encumber the same real estate. If a senior secured loan is foreclosed, that foreclosure would extinguish our rights in the collateral for our mezzanine loan. In order to protect our economic interest in that collateral, we would need to be prepared, on an expedited basis, to advance funds to the senior lenders in order to cure defaults under the senior secured loans and prevent such a foreclosure. If a senior secured loan has matured or has been accelerated, then in order to protect our economic interest in the collateral, we would need to be prepared, on an expedited basis, to purchase or pay off that senior secured loan, which could require an infusion of fresh capital as large or larger than our initial investment. Our ability to sell or syndicate a mezzanine loan could be limited by transfer restrictions in the intercreditor agreement with the senior secured lenders. Our ability to negotiate modifications to the mezzanine loan documents with our borrowers could be limited by restrictions on modifications in the intercreditor agreement. Since mezzanine loans are typically secured by pledges of equity rather than direct liens on real estate, our mezzanine loan investments are more vulnerable than our mortgage loan investments to losses caused by competing creditor claims, unauthorized transfers, or bankruptcies.

Our tenants, operators and managers may be adversely affected by healthcare regulation and enforcement.

Regulation of the healthcare industry generally has intensified over time both in the number and type of regulations and in the efforts to enforce those regulations. This is particularly true for large for-profit, multi-facility providers like Atria, Sunrise, Brookdale Senior Living, Kindred and Ardent. Federal, state and local laws and regulations affecting the healthcare industry include those relating to, among other things, licensure, conduct of operations, ownership of facilities, addition of facilities and equipment, allowable costs, services, prices for services, qualified beneficiaries, quality of care, patient rights, fraudulent or abusive behavior, financial and other arrangements that may be entered into by healthcare providers and the research, development, clinical testing, manufacture and marketing of life science products. In addition, changes in enforcement policies by federal and state governments have resulted in an increase in the number of inspections, citations of regulatory deficiencies and other regulatory sanctions, including terminations from the Medicare and Medicaid programs, bars

on Medicare and Medicaid payments for new admissions, civil monetary penalties and even criminal penalties. See “Governmental Regulation—Healthcare Regulation” included in Item 1 of this Annual Report on Form 10-K. We are unable to predict the scope of future federal, state and local regulations and legislation, including the Medicare and Medicaid statutes and regulations, or the intensity of enforcement efforts with respect to such regulations and legislation, and any changes in the regulatory framework could have a material adverse effect on our tenants, operators and managers, which, in turn, could have a Material Adverse Effect on us.

If our tenants, operators and managers fail to comply with the extensive laws, regulations and other requirements applicable to their businesses and the operation of our properties, they could become ineligible to receive reimbursement from governmental and private third-party payor programs, face bans on admissions of new patients or residents, suffer civil or criminal penalties or be required to make significant changes to their operations. Our tenants, operators and managers also could face increased costs related to changes in healthcare regulation, such as the possible repeal of the ACA by the new presidential administration and Republican-controlled Congress and a shift toward less comprehensive health coverage, or be forced to expend considerable resources in responding to an investigation or other enforcement action under applicable laws or regulations. In such event, the results of operations and financial condition of our tenants, operators and managers and the results of operations of our properties operated or managed by those entities could be adversely affected, which, in turn, could have a Material Adverse Effect on us.

Changes in the reimbursement rates or methods of payment from third-party payors, including insurance companies and the Medicare and Medicaid programs, could have a material adverse effect on certain of our tenants and operators and on us.

Certain of our tenants and operators rely on reimbursement from third-party payors, including the Medicare (both traditional Medicare and "managed" Medicare/Medicare Advantage) and Medicaid programs, for substantially all of their revenues. Federal and state legislators and regulators have adopted or proposed various cost-containment measures that would limit payments to healthcare providers, and budget crises and financial shortfalls have caused states to implement or consider Medicaid rate freezes or cuts. See “Governmental Regulation—Healthcare Regulation” included in Item 1 of this Annual Report on Form 10-K. Private third-party payors also have continued their efforts to control healthcare costs. In addition, coverage expansions via the ACA through Medicaid expansion and health insurance exchanges may be scaled back as the new presidential administration leads efforts to repeal and replace the ACA. We cannot assure you that our tenants and operators who currently depend on governmental or private payor reimbursement will be adequately reimbursed for the services they provide. Significant limits by governmental and private third-party payors on the scope of services reimbursed or on reimbursement rates and fees, whether from legislation, administrative actions or private payor efforts, could have a material adverse effect on the liquidity, financial condition and results of operations of certain of our tenants and operators, which could affect adversely their ability to comply with the terms of our leases and have a Material Adverse Effect on us.

The healthcare industry trend away from a traditional fee for service reimbursement model towards value-based payment approaches may negatively impact certain of our tenants’ revenues and profitability

Certain of our tenants, specifically those providers in the post-acute and general acute care hospital space, are subject to the broad trend in the healthcare industry toward value-based purchasing of healthcare services. These value-based purchasing programs include both public reporting of quality data and preventable adverse events tied to the quality and efficiency of care provided by facilities. Medicare and Medicaid require healthcare facilities, including hospitals and skilled nursing facilities, to report certain quality data to receive full reimbursement updates. In addition Medicare does not reimburse for care related to certain preventable adverse events (also called “never events”). Many large commercial payors currently require healthcare facilities to report quality data, and several commercial payors do not reimburse hospitals for certain preventable adverse events.

During the Obama administration, HHS focused on tying Medicare payments to quality or value through alternative payment models, which generally aim to make providers attentive to the total costs of treatment. Examples of alternative payment models include bundled-payment arrangements. It is unclear whether such models will successfully coordinate care and reduce costs or whether they will decrease reimbursement. The value-based purchasing trend is not limited to the public sector. Several of the nation’s largest commercial payors have also expressed an intent to increase reliance on value-based reimbursement arrangements. Further, many large commercial payors require hospitals to report quality data, and several commercial payors do not reimburse hospitals for certain preventable adverse events.

While the transition of presidential administrations and possible repeal of the ACA create unpredictability, we expect value-based purchasing programs, including programs that condition reimbursement on patient outcome measures, to become more common and to involve a higher percentage of reimbursement amounts. We are unable at this time to predict how this trend will affect the revenues and profitability of those of our tenants who are providers of healthcare services; however, if

this trend significantly and adversely affects their profitability, it could in turn negatively affect their ability and willingness to comply with the terms of their leases with us and or renew those leases upon expiration, which could have a Material Adverse Effect on us.

If controls imposed on certain of our tenants who provide healthcare services that are reimbursed by Medicare, Medicaid and other third-party payors to reduce admissions and length of stay affect inpatient volumes at our healthcare facilities, the financial condition or results of operations of those tenants could be adversely affected.

Controls imposed by Medicare, Medicaid and commercial third-party payors designed to reduce admissions and lengths of stay, commonly referred to as “utilization reviews,” have affected and are expected to continue to affect certain of our healthcare facilities, specifically our acute care hospitals and post-acute facilities. Utilization review entails the review of the admission and course of treatment of a patient by managed care plans. Inpatient utilization, average lengths of stay and occupancy rates continue to be negatively affected by payor-required preadmission authorization and utilization review and by payor pressures to maximize outpatient and alternative healthcare delivery services for less acutely ill patients. Efforts to impose more stringent cost controls and reductions are expected to continue, which could negatively impact the financial condition of our tenants who provide healthcare services in our hospitals and post-acute facilities. If so, this could adversely affect these tenants’ ability and willingness to comply with the terms of their leases with us and or renew those leases upon expiration, which could have a Material Adverse Effect on us.

The implementation of new patient criteria for LTACs will change the basis upon which certain of our tenants are reimbursed by Medicare, which could adversely affect those tenants’ revenues and profitability.

As part of the Pathway for SGR Reform Act of 2013 enacted on December 26, 2013, Congress adopted various legislative changes impacting LTACs. These legislative changes create new Medicare criteria and payment rules for LTACs, and could have a material adverse impact on the revenues and profitability of the tenants of our LTACs. This material adverse impact could, in turn, negatively affect those tenants’ ability and willingness to comply with the terms of their leases with us or renew those leases upon expiration, which could have a Material Adverse Effect on us.

The hospitals on or near whose campuses our MOBs are located and their affiliated health systems could fail to remain competitive or financially viable, which could adversely impact their ability to attract physicians and physician groups to our MOBs.

Our MOB operations depend on the competitiveness and financial viability of the hospitals on or near whose campuses our MOBs are located and their ability to attract physicians and other healthcare-related clients to our MOBs. The viability of these hospitals, in turn, depends on factors such as the quality and mix of healthcare services provided, competition for patients, physicians and physician groups, demographic trends in the surrounding community, market position and growth potential, as well as the ability of the affiliated health systems to provide economies of scale and access to capital. If a hospital on or near whose campus one of our MOBs is located fails or becomes unable to meet its financial obligations, and if an affiliated health system is unable to support that hospital, the hospital may be unable to compete successfully or could be forced to close or relocate, which could adversely impact its ability to attract physicians and other healthcare-related clients. Because we rely on proximity to and affiliations with hospitals to create leasing demand in our MOBs, a hospital’s inability to remain competitive or financially viable, or to attract physicians and physician groups, could materially adversely affect our MOB operations and have a Material Adverse Effect on us.

Our development and redevelopment projects, including projects undertaken through our joint ventures, may not yield anticipated returns.

We consider and, when appropriate, invest in various development and redevelopment projects. In deciding whether to make an investment in a particular project, we make certain assumptions regarding the expected future performance of the property. Our assumptions are subject to risks generally associated with development and redevelopment projects, including, among others, that:


•	We may be unable to obtain financing for the project on favorable terms or at all;


•	We may not complete the project on schedule or within budgeted amounts;


•	We may encounter delays in obtaining or fail to obtain all necessary zoning, land use, building, occupancy, environmental and other governmental permits and authorizations, or underestimate the costs necessary to develop or redevelop the property to market standards;


•	Construction or other delays may provide tenants or residents the right to terminate preconstruction leases or cause us to incur additional costs;


•	Volatility in the price of construction materials or labor may increase our project costs;


•	In the case of our MOB developments, hospitals or health systems may maintain significant decision-making authority with respect to the development schedule;


•	Our builders may fail to perform or satisfy the expectations of our clients or prospective clients;


•	We may incorrectly forecast risks associated with development in new geographic regions;


•	Tenants may not lease space at the quantity or rental rate levels or on the schedule projected;


•	Demand for our project may decrease prior to completion, including due to competition from other developments; and


•	Lease rates and rents at newly developed or redeveloped properties may fluctuate based on factors beyond our control, including market and economic conditions.

If any of the risks described above occur, our development and redevelopment projects, including projects undertaken through our joint ventures, may not yield anticipated returns, which could have a Material Adverse Effect on us.

Our investments in joint ventures and unconsolidated entities could be adversely affected by our lack of sole decision-making authority, our reliance on our joint venture partners’ financial condition, any disputes that may arise between us and our joint venture partners, and our exposure to potential losses from the actions of our joint venture partners.

As of December 31, 2016 , we owned 33 MOBs, 13 seniors housing communities, eight life science and innovation centers and one specialty hospital through consolidated joint ventures, and we had ownership interests ranging between 5% and 25% in five MOBs, 21 seniors housing communities and 13 skilled nursing facilities through investments in unconsolidated entities. In addition, we had a 34% ownership interest in Atria and a 9.9% interest in Ardent as of December 31, 2016 . These joint ventures and unconsolidated entities involve risks not present with respect to our wholly owned properties, including the following:

•

We may be unable to take actions that are opposed by our joint venture partners under arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint venture and any property owned by the joint venture, such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property;


•	For joint ventures in which we have a noncontrolling interest, our joint venture partners may take actions that we oppose;


•	Our ability to sell or transfer our interest in a joint venture to a third party may be restricted if we fail to obtain the prior consent of our joint venture partners;


•	Our joint venture partners may become bankrupt or fail to fund their share of required capital contributions, which could delay construction or development of a property or increase our financial commitment to the joint venture;


•	Our joint venture partners may have business interests or goals with respect to a property that conflict with our business interests and goals, including with respect to the timing, terms and strategies for investment, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property;


•	Disagreements with our joint venture partners could result in litigation or arbitration that increases our expenses, distracts our officers and directors, and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; and


•	We may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments.

Events that adversely affect the ability of seniors and their families to afford daily resident fees at our seniors housing communities could cause our occupancy rates, resident fee revenues and results of operations to decline.

Assisted and independent living services generally are not reimbursable under government reimbursement programs, such as Medicare and Medicaid. A large majority of the resident fee revenues generated by our senior living operations, therefore, are derived from private pay sources consisting of the income or assets of residents or their family members. In light of the significant expense associated with building new properties and staffing and other costs of providing services, typically only seniors with income or assets that meet or exceed the comparable region median can afford the daily resident and care fees

at our seniors housing communities, and a weak economy, depressed housing market or changes in demographics could adversely affect their continued ability to do so. If the managers of our seniors housing communities are unable to attract and retain seniors that have sufficient income, assets or other resources to pay the fees associated with assisted and independent living services, the occupancy rates, resident fee revenues and results of operations of our senior living operations could decline, which, in turn, could have a Material Adverse Effect on us.

Our tenants in the life science industry face high levels of regulation, expense and uncertainty.

Life science tenants, particularly those involved in developing and marketing pharmaceutical products, are subject to certain unique risks, including the following:

Some of our tenants require significant outlays of funds for the research and development and clinical testing of their products and technologies. The economic environment in recent years has significantly impacted the ability of these companies to access the capital markets and venture capital funding. In addition, state and federal government and university budgets have been negatively impacted by the recent economic environment and, as a result certain programs, including grants related to biotechnology research and development, may be at risk of being eliminated or cut back significantly. If private investors, the government, universities, public markets or other sources of funding are unavailable to support such development, a tenant’s business may fail.

The research and development, clinical testing, manufacture and marketing of some of our tenants’ products require federal, state and foreign regulatory approvals. The approval process is typically long, expensive and uncertain. Even if our tenants have sufficient funds to seek approvals, one or all of their products may fail to obtain the required regulatory approvals on a timely basis or at all. Furthermore, our tenants may only have a small number of products under development. If one product fails to receive the required approvals at any stage of development, it could significantly adversely affect our tenant’s entire business and its ability to pay rent.

Our tenants may be unable to adequately protect their intellectual property under patent, copyright or trade secret laws. Failure to do so could jeopardize their ability to profit from their efforts and to protect their products from competition.

Collaborative relationships with other life science entities may be crucial to the development, manufacturing, distribution or marketing of our tenants’ products. If these other entities fail to fulfill their obligations under these collaborative arrangements, our tenants’ businesses will suffer.

Legislation to reform the U.S. healthcare system, including regulations and legislation relating to the ACA, may include government intervention in product pricing and other changes that adversely affect reimbursement for our tenants’ marketable products. In addition, sales of many of our tenants’ marketable products are dependent, in large part, on the availability and extent of reimbursement from government health administration authorities, private health insurers and other organizations. Changes in government regulations, price controls or third-party payors’ reimbursement policies may reduce reimbursement for our tenants’ marketable products and adversely impact our tenants’ businesses.

We cannot assure you that our tenants in the life science industry will be successful in their businesses. If our tenants’ businesses are adversely affected, they may have difficulty making payments to us, which could materially adversely affect our business, results of operations and financial condition.

The amount and scope of insurance coverage provided by our policies and policies maintained by our tenants, operators and managers may not adequately insure against losses.

We maintain or require in our lease, management and other agreements that our tenants, operators and managers maintain all applicable lines of insurance on our properties and their operations. Although we regularly review the amount and scope of insurance provided by our policies and required to be maintained by our tenants, operators and managers and believe the coverage provided to be customary for similarly situated companies in our industry, we cannot assure you that we or our tenants, operators and managers will continue to be able to maintain adequate levels of insurance. We also cannot assure you that we or our tenants, operators and managers will maintain the required coverages, that we will continue to require the same levels of insurance under our lease, management and other agreements, that such insurance will be available at a reasonable cost in the future or that the policies maintained will fully cover all losses on our properties upon the occurrence of a catastrophic event, nor can we make any guaranty as to the future financial viability of the insurers that underwrite our policies and the policies maintained by our tenants, operators and managers.

captive limited purpose entities generally estimate the future cost of general and professional liability through actuarial studies that rely primarily on historical data. However, due to the rise in the number and severity of professional claims against healthcare providers, these actuarial studies may underestimate the future cost of claims, and reserves for future claims may not be adequate to cover the actual cost of those claims. As a result, the tenants and operators of our properties who self-insure could incur large funded and unfunded general and professional liability expenses, which could materially adversely affect their liquidity, financial condition and results of operations and, in turn, their ability to satisfy their obligations to us. If we or the managers of our senior living operations decide to implement a captive or self-insurance program, any large funded and unfunded general and professional liability expenses incurred could have a Material Adverse Effect on us.

Should an uninsured loss or a loss in excess of insured limits occur, we could incur substantial liability or lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenues from the property. Following the occurrence of such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. We cannot assure you that material uninsured losses, or losses in excess of insurance proceeds, will not occur in the future.

Significant legal actions or regulatory proceedings could subject us or our tenants, operators and managers to increased operating costs and substantial uninsured liabilities, which could materially adversely affect our or their liquidity, financial condition and results of operations.

From time to time, we may be subject to claims brought against us in lawsuits and other legal or regulatory proceedings arising out of our alleged actions or the alleged actions of our tenants, operators and managers for which such tenants, operators and managers may have agreed to indemnify, defend and hold us harmless. An unfavorable resolution of any such litigation or proceeding could materially adversely affect our or their liquidity, financial condition and results of operations and have a Material Adverse Effect on us.

In certain cases, we and our tenants, operators and managers may be subject to professional liability claims brought by plaintiffs’ attorneys seeking significant punitive damages and attorneys’ fees. Due to the historically high frequency and severity of professional liability claims against seniors housing and healthcare providers, the availability of professional liability insurance has decreased and the premiums on such insurance coverage remain costly. As a result, insurance protection against such claims may not be sufficient to cover all claims against us or our tenants, operators or managers, and may not be available at a reasonable cost. If we or our tenants, operators and managers are unable to maintain adequate insurance coverage or are required to pay punitive damages, we or they may be exposed to substantial liabilities.

The occurrence of cyber incidents could disrupt our operations, result in the loss of confidential information and/or damage our business relationships and reputation.

As our reliance on technology has increased, our business is subject to greater risk from cyber incidents, including attempts to gain unauthorized access to our or our managers’ systems to disrupt operations, corrupt data or steal confidential information, and other electronic security breaches. While we and our managers have implemented measures to help mitigate these threats, such measures cannot guarantee that we will be successful in preventing a cyber incident. The occurrence of a cyber incident could disrupt our operations, or the operations of our managers, compromise the confidential information of our employees or the residents in our seniors housing communities, and/or damage our business relationships and reputation.

Our operators may be sued under a federal whistleblower statute.

Our operators who engage in business with the federal government may be sued under a federal whistleblower statute designed to combat fraud and abuse in the healthcare industry. See “Governmental Regulation—Healthcare Regulation” included in Item 1 of this Annual Report on Form 10-K. These lawsuits can involve significant monetary damages and award bounties to private plaintiffs who successfully bring these suits. If any of these lawsuits were brought against our operators, such suits combined with increased operating costs and substantial uninsured liabilities could have a material adverse effect on our operators’ liquidity, financial condition and results of operations and on their ability to satisfy their obligations under our leases, which, in turn, could have a Material Adverse Effect on us.

We could incur substantial liabilities and costs if any of our properties are found to be contaminated with hazardous substances or we become involved in any environmental disputes.

Under federal and state environmental laws and regulations, a current or former owner of real property may be liable for costs related to the investigation, removal and remediation of hazardous or toxic substances or petroleum that are released from or are present at or under, or that are disposed of in connection with such property. Owners of real property may also face other environmental liabilities, including government fines and penalties imposed by regulatory authorities and damages for injuries to persons, property or natural resources. Environmental laws and regulations often impose liability without regard to whether the owner was aware of, or was responsible for, the presence, release or disposal of hazardous or toxic substances or

petroleum. In certain circumstances, environmental liability may result from the activities of a current or former operator of the property. Although we generally have indemnification rights against the current operators of our properties for contamination caused by them, such indemnification may not adequately cover all environmental costs. See “Governmental Regulation—Environmental Regulation” included in Item 1 of this Annual Report on Form 10-K.

Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our business.

The success of our business depends, in part, on the leadership and performance of our executive management team and key employees, and our ability to attract, retain and motivate talented employees could significantly impact our future performance. Competition for these individuals is intense, and we cannot assure you that we will retain our key officers and employees or that we will be able to attract and retain other highly qualified individuals in the future. Losing any one or more of these persons could have a Material Adverse Effect on us.

Failure to maintain effective internal controls could harm our business, results of operations and financial condition.

Pursuant to the Sarbanes-Oxley Act of 2002, we are required to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of such control. Because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud, effective internal controls over financial reporting may not prevent or detect misstatement and can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls over financial reporting and our operating internal controls, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, our business, results of operations and financial condition could be materially adversely harmed and we could fail to meet our reporting obligations.

Economic and other conditions that negatively affect geographic locations to which a greater percentage of our NOI is attributed could adversely affect our financial results.

For the year ended December 31, 2016 , approximately 36.5% of our total NOI (excluding amounts in discontinued operations) was derived from properties located in California ( 13.8% ), New York ( 5.9% ), Texas ( 7.0% ), Illinois ( 5.3% ), and Florida ( 4.5% ). As a result, we are subject to increased exposure to adverse conditions affecting these regions, including downturns in the local economies or changes in local real estate conditions, increased construction and competition or decreased demand for our properties, regional climate events and changes in state-specific legislation, which could adversely affect our business and results of operations.

We may be adversely affected by fluctuations in currency exchange rates.

Our ownership of properties in Canada and the United Kingdom currently subjects us to fluctuations in the exchange rates between U.S. dollars and Canadian dollars or the British pound, which may, from time to time, impact our financial condition and results of operations. If we continue to expand our international presence through investments in, or acquisitions or development of, seniors housing or healthcare assets outside the United States, Canada or the United Kingdom, we may transact business in other foreign currencies. Although we may pursue hedging alternatives, including borrowing in local currencies, to protect against foreign currency fluctuations, we cannot assure you that such fluctuations will not have a Material Adverse Effect on us.

Risks Arising from Our Capital Structure

We may become more leveraged.

As of December 31, 2016 , we had approximately $11.1 billion of outstanding indebtedness. The instruments governing our existing indebtedness permit us to incur substantial additional debt, including secured debt, and we may satisfy our capital and liquidity needs through additional borrowings. A high level of indebtedness would require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, thereby reducing the funds available to implement our business strategy and make distributions to stockholders. A high level of indebtedness could also have the following consequences:


•	Potential limits on our ability to adjust rapidly to changing market conditions and vulnerability in the event of a downturn in general economic conditions or in the real estate or healthcare industries;


•	Potential impairment of our ability to obtain additional financing to execute on our business strategy; and


•	Potential downgrade in the rating of our debt securities by one or more rating agencies, which could have the effect of, among other things, limiting our access to capital and increasing our cost of borrowing.

In addition, from time to time, we mortgage certain of our properties to secure payment of indebtedness. If we are unable to meet our mortgage payments, then the encumbered properties could be foreclosed upon or transferred to the mortgagee with a resulting loss of income and asset value.

We are exposed to increases in interest rates, which could reduce our profitability and adversely impact our ability to refinance existing debt, sell assets or engage in acquisition, investment, development and redevelopment activity, and our decision to hedge against interest rate risk might not be effective.

We receive a significant portion of our revenues by leasing assets under long-term triple-net leases that generally provide for fixed rental rates subject to annual escalations, while certain of our debt obligations are floating rate obligations with interest and related payments that vary with the movement of LIBOR, Bankers’ Acceptance or other indexes. The generally fixed rate nature of a significant portion of our revenues and the variable rate nature of certain of our debt obligations create interest rate risk. Although our operating assets provide a partial hedge against interest rate fluctuations, if interest rates rise, the costs of our existing floating rate debt and any new debt that we incur would increase. These increased costs could reduce our profitability, impair our ability to meet our debt obligations, or increase the cost of financing our acquisition, investment, development and redevelopment activity. An increase in interest rates also could limit our ability to refinance existing debt upon maturity or cause us to pay higher rates upon refinancing, as well as decrease the amount that third parties are willing to pay for our assets, thereby limiting our ability to promptly reposition our portfolio in response to changes in economic or other conditions.

We may seek to manage our exposure to interest rate volatility with hedging arrangements that involve additional risks, including the risks that counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that the amount of income we earn from hedging transactions may be limited by federal tax provisions governing REITs, and that these arrangements may cause us to pay higher interest rates on our debt obligations than otherwise would be the case. Moreover, no amount of hedging activity can fully insulate us from the risks associated with changes in interest rates. Failure to hedge effectively against interest rate risk, if we choose to engage in such activities, could adversely affect our results of operations and financial condition.

Limitations on our ability to access capital could have an adverse effect on our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy.

We cannot assure you that we will be able to raise the capital necessary to meet our debt service obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy, if our cash flow from operations is insufficient to satisfy these needs, and the failure to do so could have a Material Adverse Effect on us. Although we believe that we have sufficient access to capital and other sources of funding to meet our expected liquidity needs, we cannot assure you that conditions in the capital markets will not deteriorate or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings and our results of operation and financial condition. If we cannot access capital at an acceptable cost or at all, we may be required to liquidate one or more investments in properties at times that may not permit us to maximize the return on those investments or that could result in adverse tax consequences to us.

As a public company, our access to debt and equity capital depends, in part, on the trading prices of our senior notes and common stock, which, in turn, depend upon market conditions that change from time to time, such as the market’s perception of our financial condition, our growth potential and our current and expected future earnings and cash distributions. Our failure to meet the market’s expectation with regard to future earnings and cash distributions or a significant downgrade in the ratings assigned to our long-term debt could impact our ability to access capital or increase our borrowing costs. We also rely on the financial institutions that are parties to our unsecured revolving credit facility. If these institutions become capital constrained, tighten their lending standards or become insolvent or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time, they may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our unsecured revolving credit facility and, over time, could negatively impact our ability to consummate acquisitions, repay indebtedness as it matures, fund capital expenditures or make distributions to our stockholders.

Covenants in the instruments governing our and our subsidiaries’ existing indebtedness limit our operational flexibility, and a covenant breach could materially adversely affect our operations.

The terms of the instruments governing our existing indebtedness require us to comply with certain customary financial and other covenants, such as maintaining debt service coverage, leverage ratios and minimum net worth requirements. Our continued ability to incur additional debt and to conduct business in general is subject to our compliance with these covenants, which limit our operational flexibility. Breaches of these covenants could result in defaults under the applicable debt

instruments and could trigger defaults under any of our other indebtedness that is cross-defaulted against such instruments, even if we satisfy our payment obligations. In addition, covenants contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness may restrict our ability to obtain cash distributions from such subsidiaries for the purpose of meeting our debt service obligations. Financial and other covenants that limit our operational flexibility, as well as defaults resulting from our breach of any of these covenants, could have a Material Adverse Effect on us.

Risks Arising from Our Status as a REIT

Loss of our status as a REIT would have significant adverse consequences for us and the value of our common stock.

If we lose our status as a REIT (currently or with respect to any tax years for which the statute of limitations has not expired), we will face serious tax consequences that will substantially reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions to our stockholders for each of the years involved because:


•	We would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates;


•	We could be subject to the federal alternative minimum tax and increased state and local taxes; and


•	Unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.

In addition, in such event we would no longer be required to pay dividends to maintain REIT status, which could adversely affect the value of our common stock.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of factual matters and circumstances not entirely within our control, as well as new legislation, regulations, administrative interpretations or court decisions, may adversely affect our investors or our ability to remain qualified as a REIT for tax purposes. Although we believe that we currently qualify as a REIT, we cannot assure you that we will continue to qualify for all future periods.

The 90% distribution requirement will decrease our liquidity and may limit our ability to engage in otherwise beneficial transactions.

To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise tax, we must make distributions to our stockholders. See “Certain U.S. Federal Income Tax Considerations—Requirements for Qualification as a REIT—Annual Distribution Requirements” included in Item 1 of this Annual Report on Form 10-K. Such distributions reduce the funds we have available to finance our investment, acquisition, development and redevelopment activity and may limit our ability to engage in transactions that are otherwise in the best interests of our stockholders.

Although we do not anticipate any inability to satisfy the REIT distribution requirement, from time to time, we may not have sufficient cash or other liquid assets to do so. For example, timing differences between the actual receipt of income and actual payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand, or non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may prevent us from having sufficient cash or liquid assets to satisfy the 90% distribution requirement.

In the event that timing differences occur or we decide to retain cash or to distribute such greater amount as may be necessary to avoid income and excise taxation, we may seek to borrow funds, issue additional equity securities, pay taxable stock dividends, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements. Any of these actions may require us to raise additional capital to meet our obligations; however, see “Risks Arising from Our Capital Structure—Limitations on our ability to access capital could have an adverse effect on our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy.” The terms of the instruments governing our existing indebtedness restrict our ability to engage in certain of these transactions.

To preserve our qualification as a REIT, our certificate of incorporation contains ownership limits with respect to our capital stock that may delay, defer or prevent a change of control of our company.

To assist us in preserving our qualification as a REIT, our certificate of incorporation provides that if a person acquires beneficial ownership of more than 9.0% of our outstanding common stock or more than 9.9% of our outstanding preferred stock, the shares that are beneficially owned in excess of the applicable limit are considered “excess shares” and are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by our Board of Directors. The trust is entitled to all dividends with respect to the excess shares and the trustee may exercise all

voting power over the excess shares. In addition, we have the right to purchase the excess shares for a price equal to the lesser of (i) the price per share in the transaction that created the excess shares or (ii) the market price on the day we purchase the shares, but if we do not purchase the excess shares, the trustee of the trust is required to transfer the shares at the direction of our Board of Directors. These ownership limits could delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.

Our use of TRSs is limited under the Code.

Under the Code, no more than 25% (20% for taxable years beginning after December 31, 2017) of the value of the gross assets of a REIT may be represented by securities of one or more TRSs. This limitation may affect our ability to increase the size of our TRSs’ operations and assets, and there can be no assurance that we will be able to comply with the applicable limitation, or that such compliance will not adversely affect our business. Also, our TRSs may not, among other things, operate or manage certain health care facilities, which may cause us to forego investments we might otherwise make. Finally, we may be subject to a 100% excise tax on the income derived from certain transactions with our TRSs that are not on an arm's-length basis. We believe our arrangements with our TRSs are on arm's-length terms and intend to continue to operate in a manner that allows us to avoid incurring the 100% excise tax described above, but there can be no assurance that we will be able to avoid application of that tax.

The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.

Legislative or other actions could have a negative effect on our stockholders or us.

The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. The recent U.S. president election, coupled with a Republican-controlled Congress, makes tax reform more likely in the near-term. Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT , the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2. Properties

Seniors Housing and Healthcare Properties

As of December 31, 2016 , we owned approximately 1,300 properties (including properties owned through investments in unconsolidated entities and properties classified as held for sale), consisting of seniors housing communities, MOBs, life science and innovation centers, skilled nursing facilities, specialty hospitals and general acute care hospitals, and we had six properties under development, including one property that is owned by an unconsolidated real estate entity. We believe that maintaining a balanced portfolio of high-quality assets diversified by investment type, geographic location, asset type, tenant/operator, revenue source and operating model makes us less susceptible to single-state regulatory or reimbursement changes, regional climate events and local economic downturns and diminishes the risk that any single factor or event could materially harm our business.

As of December 31, 2016 , we had $1.7 billion aggregate principal amount of mortgage loan indebtedness outstanding, secured by 123 of our properties. Excluding those portions attributed to our joint venture partners, our share of mortgage loan indebtedness outstanding was $1.6 billion .

The following table provides additional information regarding the geographic diversification of our portfolio of properties as of December 31, 2016 (including properties owned through investments in unconsolidated entities, but excluding properties classified as held for sale):



	Seniors Housing Communities		Skilled Nursing Facilities		MOBs		Life Science and Innovation Centers		Specialty Hospitals		General Acute Care
Geographic Location	# of Properties	Units	# of Properties	Licensed Beds	# of Properties	Square Feet ⁽¹⁾	# of Properties	Square Feet ⁽¹⁾	# of Properties	Licensed Beds	# of Properties	Licensed Beds
Alabama	6	382	—	—	4	469	—	—	—	—	—	—
Arizona	28	2,562	—	—	13	830	—	—	1	60	—	—
Arkansas	4	287	—	—	1	5	—	—	—	—	—	—
California	86	9,743	4	483	25	2,034	—	—	6	503	—	—
Colorado	19	1,689	2	190	13	891	—	—	1	68	—	—
Connecticut	14	1,625	—	—	—	—	2	1,032	—	—	—	—
District of Columbia	—	—	—	—	2	102	—	—	—	—	—	—
Florida	49	4,582	—	—	19	583	1	259	6	511	—	—
Georgia	20	1,751	1	162	14	1,188	—	—	—	—	—	—
Idaho	1	70	6	513	—	—	—	—	—	—	—	—
Illinois	25	2,942	1	82	37	1,547	1	129	4	430	—	—
Indiana	11	921	8	1,109	23	1,603	—	—	1	59	—	—
Kansas	9	541	—	—	1	33	—	—	—	—	—	—
Kentucky	10	911	3	377	4	173	—	—	1	384	—	—
Louisiana	1	58	—	—	5	361	—	—	—	—	—	—
Maine	6	445	—	—	—	—	—	—	—	—	—	—
Maryland	5	360	—	—	2	83	5	489	—	—	—	—
Massachusetts	19	2,104	8	963	—	—	—	—	—	—	—	—
Michigan	23	1,457	—	—	14	599	—	—	—	—	—	—
Minnesota	18	1,029	—	—	4	241	—	—	—	—	—	—
Mississippi	—	—	—	—	1	51	—	—	—	—	—	—
Missouri	2	153	—	—	20	1,096	3	465	2	227	—	—
Montana	2	182	2	276	—	—	—	—	—	—	—	—
Nebraska	1	134	—	—	—	—	—	—	—	—	—	—
Nevada	5	589	—	—	5	416	—	—	1	52	—	—
New Hampshire	1	125	1	290	—	—	—	—	—	—	—	—
New Jersey	13	1,184	1	153	3	37	—	—	—	—	—	—
New Mexico	4	468	—	—	—	—	—	—	2	123	4	544
New York	42	4,638	—	—	4	244	—	—	—	—	—	—
North Carolina	23	1,894	3	297	20	832	6	1,141	1	124	—	—
North Dakota	2	115	—	—	1	114	—	—	—	—	—	—
Ohio	21	1,267	6	907	28	1,225	—	—	1	50	—	—
Oklahoma	8	463	—	—	—	—	—	—	—	—	4	954
Oregon	29	2,581	—	—	1	105	—	—	—	—	—	—
Pennsylvania	32	2,362	4	620	10	878	3	566	1	52	—	—
Rhode Island	6	596	—	—	—	—	—	—	—	—	—	—
South Carolina	5	402	—	—	20	1,104	—	—	—	—	—	—
South Dakota	4	182	—	—	—	—	—	—	—	—	—	—
Tennessee	18	1,420	—	—	11	405	—	—	1	49	—	—
Texas	51	3,916	—	—	22	1,332	—	—	9	590	1	445
Utah	3	321	—	—	—	—	—	—	—	—	—	—
Vermont	—	—	1	144	—	—	—	—	—	—	—	—
Virginia	8	655	3	432	5	231	2	191	—	—	—	—
Washington	25	2,417	8	737	10	579	—	—	—	—	—	—
West Virginia	2	124	4	326	—	—	—	—	—	—	—	—
Wisconsin	51	2,256	—	—	21	1,105	—	—	—	—	—	—
Wyoming	2	168	—	—	—	—	—	—	—	—	—	—
Total U.S.	714	62,071	66	8,061	363	20,496	23	4,272	38	3,282	9	1,943
Canada	41	4,499	—	—	—	—	—	—	—	—	—	—
United Kingdom	10	663	—	—	—	—	—	—	—	—	3	121
Total	765	67,233	66	8,061	363	20,496	23	4,272	38	3,282	12	2,064


⁽¹⁾	^{Square Feet are in thousands}

Corporate Offices

Our headquarters are located in Chicago, Illinois, and we have additional corporate offices in: Louisville, Kentucky; Plano, Texas; and Irvine, California. We lease all of our corporate offices.

ITEM 3. Legal Proceedings

The information contained in “ NOTE 14—COMMITMENTS AND CONTINGENCIES ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. Except as set forth therein, we are not a party to, nor is any of our property the subject of, any material pending legal proceedings.

ITEM 4. Mine Safety Disclosures

Not applicable.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock, par value $0.25 per share, is listed and traded on the New York Stock Exchange (the “NYSE”) under the symbol “VTR.” The following table sets forth, for the periods indicated, the high and low sales prices of our common stock as reported on the NYSE and the dividends declared per share.



	Sales Price of Common Stock				Cash Dividends Declared
	High		Low		Cash Dividends Declared
2015
First Quarter	$	80.95	$	69.12	$	0.79
Second Quarter	76.90		61.82		0.79
Third Quarter	68.52		52.66		0.73
Fourth Quarter	58.38		49.68		0.73
2016
First Quarter	$	63.22	$	48.43	$	0.73
Second Quarter	72.82		59.69		0.73
Third Quarter	76.56		67.33		0.73
Fourth Quarter	69.19		57.86		0.775

As of February 9, 2017 , we had 354.6 million shares of our common stock outstanding held by approximately 4,750 stockholders of record.

Dividends and Distributions

We pay regular quarterly dividends to holders of our common stock to comply with the provisions of the Code governing REITs. On February 10, 2017 , our Board of Directors declared the first quarterly installment of our 2017 dividend on our common stock in the amount of $0.775 per share, payable in cash on March 31, 2017 to stockholders of record on March 7, 2017 . We expect to distribute at least 100% of our taxable net income, after the use of any net operating loss carryforwards, to our stockholders for 2017 . See “Certain U.S. Federal Income Tax Considerations—Requirements for Qualification as a REIT—Annual Distribution Requirements” included in Part I, Item 1 of this Annual Report on Form 10-K.

In general, our Board of Directors makes decisions regarding the nature, frequency and amount of our dividends on a quarterly basis. Because the Board considers many factors when making these decisions, including our present and future liquidity needs, our current and projected financial condition and results of operations and the performance and credit quality of our tenants, operators, borrowers and managers, we cannot assure you that we will maintain the practice of paying regular quarterly dividends to continue to qualify as a REIT. Please see “Cautionary Statements” and the risk factors included in Part I, Item 1A of this Annual Report on Form 10-K for a description of other factors that may affect our distribution policy.

Prior to its suspension in July 2014, our stockholders were entitled to reinvest all or a portion of any cash distribution on their shares of our common stock by participating in our Distribution Reinvestment and Stock Purchase Plan (“DRIP”), subject to the terms of the plan. See “ NOTE 16—PERMANENT AND TEMPORARY EQUITY ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. We may determine whether or not to reinstate the DRIP at any time, in our sole discretion.

Director and Employee Stock Sales

Certain of our directors, executive officers and other employees have adopted and, from time to time in the future, may adopt non-discretionary, written trading plans that comply with Rule 10b5-1 under the Exchange Act, or otherwise monetize, gift or transfer their equity-based compensation. These transactions typically are conducted for estate, tax and financial planning purposes and are subject to compliance with our Amended and Restated Securities Trading Policy and Procedures (“Securities Trading Policy”), the minimum stock ownership requirements contained in our Guidelines on Governance and all applicable laws and regulations.

Our Securities Trading Policy expressly prohibits our directors, executive officers and employees from buying or selling derivatives with respect to our securities or other financial instruments that are designed to hedge or offset a decrease in the market value of our securities and from engaging in short sales with respect to our securities. In addition, our Securities Trading Policy prohibits our directors and executive officers from holding our securities in margin accounts or pledging our securities to secure loans without the prior approval of our Audit and Compliance Committee. Each of our executive officers has advised us that he or she is in compliance with the Securities Trading Policy and has not pledged any of our equity securities to secure margin or other loans.

Stock Repurchases

The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2016 :



	Number of Shares Repurchased ⁽¹⁾	Average Price Per Share
October 1 through October 31	106	$	67.95
November 1 through November 30	—	$	—
December 1 through December 31	—	$	—

(1)

Repurchases represent shares withheld to pay taxes on the vesting of restricted stock granted to employees under our 2006 Incentive Plan or 2012 Incentive Plan or restricted stock units granted to employees under the Nationwide Health Properties, Inc. (“NHP”) 2005 Performance Incentive Plan and assumed by us in connection with our acquisition of NHP. The value of the shares withheld is the closing price of our common stock on the date the vesting or exercise occurred (or, if not a trading day, the immediately preceding trading day) or the fair market value of our common stock at the time of the exercise, as the case may be.

Stock Performance Graph

The following performance graph compares the cumulative total return (including dividends) to the holders of our common stock from December 31, 2011 through December 31, 2016 , with the cumulative total returns of the NYSE Composite Index, the FTSE NAREIT Composite REIT Index (the “Composite REIT Index”) and the S&P 500 Index over the same period. The comparison assumes $100 was invested on December 31, 2011 in our common stock and in each of the foregoing indexes and assumes reinvestment of dividends, as applicable. We have included the NYSE Composite Index in the performance graph because our common stock is listed on the NYSE, and we have included the S&P 500 Index because we are a member of the S&P 500. We have included the Composite REIT Index because we believe that it is most representative of the industries in which we compete, or otherwise provides a fair basis for comparison with us, and is therefore particularly relevant to an assessment of our performance. The figures in the table below are rounded to the nearest dollar.



	12/31/2011	12/31/2012	12/31/2013	12/31/2014	12/31/2015	12/31/2016
Ventas	$100	$122.31	$112.96	$147.89	$139.68	$162.23
NYSE Composite Index	$100	$116.26	$146.95	$157.05	$150.81	$168.99
Composite REIT Index	$100	$119.73	$122.53	$155.89	$159.09	$174.00
S&P 500 Index	$100	$115.99	$153.55	$174.55	$176.95	$198.10

ITEM 6. Selected Financial Data

You should read the following selected financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Annual Report on Form 10-K and our Consolidated Financial Statements and the notes thereto included in Item 8 of this Annual Report on Form 10-K, as acquisitions, dispositions, changes in accounting policies and other items may impact the comparability of the financial data.



	As of and For the Years Ended December 31,
	2016			2015			2014			2013			2012
	(Dollars in thousands, except per share data)
Operating Data
Rental income	$	1,476,176		$	1,346,046		$	1,138,457		$	1,036,356		$	894,495
Resident fees and services	1,847,306			1,811,255			1,552,951			1,406,005			1,227,124
Interest expense	419,740			367,114			292,065			249,009			199,801
Property-level operating expenses	1,434,762			1,383,640			1,195,388			1,109,925			966,812
General, administrative and professional fees	126,875			128,035			121,738			115,083			98,489
Income from continuing operations attributable to common stockholders, including real estate dispositions	650,153			406,740			376,032			374,338			202,159
Discontinued operations	(922		)	11,103			99,735			79,171			160,641
Net income attributable to common stockholders	649,231			417,843			475,767			453,509			362,800
Per Share Data
Income from continuing operations attributable to common stockholders, including real estate dispositions:
Basic	$	1.88		$	1.23		$	1.28		$	1.28		$	0.69
Diluted	$	1.86		$	1.22		$	1.26		$	1.27		$	0.68
Net income attributable to common stockholders:
Basic	$	1.88		$	1.26		$	1.62		$	1.55		$	1.24
Diluted	$	1.86		$	1.25		$	1.60		$	1.54		$	1.23
Dividends declared per common share	$	2.965		$	3.04		$	2.965		$	2.735		$	2.48
Other Data
Net cash provided by operating activities	$	1,367,457		$	1,391,767		$	1,254,845		$	1,194,755		$	992,816
Net cash used in investing activities	(1,234,643		)	(2,423,692		)	(2,055,040		)	(1,282,760		)	(2,169,689		)
Net cash provided by financing activities	101,722			1,030,122			758,057			114,996			1,198,914
FFO ⁽¹⁾	1,440,544			1,365,408			1,273,680			1,208,458			1,024,567
Normalized FFO ⁽¹⁾	1,438,643			1,493,683			1,330,018			1,220,709			1,120,225
Balance Sheet Data
Real estate investments, at cost	$	25,327,215		$	23,802,454		$	20,196,770		$	21,403,592		$	19,745,607
Cash and cash equivalents	286,707			53,023			55,348			94,816			67,908
Total assets	23,166,600			22,261,918			21,165,913			19,731,494			18,980,000
Senior notes payable and other debt	11,127,326			11,206,996			10,844,351			9,364,992			8,413,646

⁽¹⁾

We consider Funds From Operations (“FFO”) and normalized FFO to be useful supplemental measures of our operating performance. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. In some cases, we provide information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.

We use the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. NAREIT defines FFO as net income attributable to common stockholders (computed in accordance with U.S. generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of real estate property, including gain or loss on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to our acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of our debt; (c) the non-cash effect of income tax benefits or expenses, the non-cash impact of changes to the Company’s executive equity compensation plan and derivative transactions that have non-cash mark-to-market impacts on our Consolidated Statements of Income; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other unusual items related to unconsolidated entities; and (g) expenses related to the re-audit and re-review in 2014 of our historical financial statements and related matters. We believe that income from continuing operations is the most comparable GAAP measure because it provides insight into our continuing operations.

FFO and normalized FFO presented in this Annual Report on Form 10-K, or otherwise disclosed by us, may not be comparable to FFO and normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO and normalized FFO should not be considered as alternatives to net income or income from continuing operations (both determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are FFO and normalized FFO necessarily indicative of sufficient cash flow to fund all of our needs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds From Operations and Normalized Funds from Operations” included in Item 7 of this Annual Report on Form 10-K for a reconciliation of FFO and normalized FFO to our GAAP earnings.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides information that management believes is relevant to an understanding and assessment of the consolidated financial condition and results of operations of Ventas, Inc. (together with its subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us” or “our”). You should read this discussion in conjunction with our Consolidated Financial Statements and the notes thereto included in Item 8 of this Annual Report on Form 10-K, as it will help you understand:


•	Our company and the environment in which we operate;


•	Our 2016 highlights and other recent developments;


•	Our critical accounting policies and estimates;


•	Our results of operations for the last three years;


•	How we manage our assets and liabilities;


•	Our liquidity and capital resources;


•	Our cash flows; and


•	Our future contractual obligations.

Corporate and Operating Environment

We are a real estate investment trust (“REIT”) with a highly diversified portfolio of seniors housing and healthcare properties located throughout the United States, Canada and the United Kingdom. As of December 31, 2016 , we owned approximately 1,300 properties (including properties owned through investments in unconsolidated entities and properties classified as held for sale), consisting of seniors housing communities, medical office buildings (“MOBs”), life science and innovation centers, skilled nursing facilities, specialty hospitals and general acute care hospitals, and we had six properties under development, including one property that is owned by an unconsolidated real estate entity. We are an S&P 500 company and headquartered in Chicago, Illinois.

We primarily invest in seniors housing and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party managers. As of December 31, 2016 , we leased a total of 549 properties (excluding MOBs and 33 properties owned through investments in unconsolidated entities) to various healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and we engaged independent operators, such as Atria Senior Living, Inc. (“Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 298 of our seniors housing communities (excluding one property owned through investments in unconsolidated entities) for us pursuant to long-term management agreements.

Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Kindred Healthcare, Inc. (together with its subsidiaries, “Kindred”) and Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”), leased from us 140 properties (excluding six properties owned through investments in unconsolidated entities and excluding one property managed by Brookdale Senior Living pursuant to a long-term management agreement), 68 properties (excluding one MOB) and ten properties, respectively, as of December 31, 2016 .

Through our Lillibridge Healthcare Services, Inc. (“Lillibridge”) subsidiary and our ownership interest in PMB Real Estate Services LLC (“PMBRES”), we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and non-mortgage loans and other investments relating to seniors housing and healthcare operators or properties.

We conduct our operations through three reportable business segments: triple-net leased properties; senior living operations; and office operations. See “ NOTE 19—SEGMENT INFORMATION ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

As of December 31, 2016 , our consolidated portfolio included 100% ownership interests in 1,180 properties and controlling joint venture interests in 55 properties, and we had non-controlling ownership interests in 39 properties through investments in unconsolidated entities. Through Lillibridge and PMBRES, we provided management and leasing services to third parties with respect to 90 MOBs as of December 31, 2016 .

Our ability to access capital in a timely and cost-effective manner is critical to the success of our business strategy because it affects our ability to satisfy existing obligations, including the repayment of maturing indebtedness, and to make future investments. Factors such as general market conditions, interest rates, credit ratings on our securities, expectations of our potential future earnings and cash distributions, and the trading price of our common stock that are beyond our control and fluctuate over time all impact our access to and cost of external capital. For that reason, we generally attempt to match the long-term duration of our investments in real property with long-term financing through the issuance of shares of our common stock or the incurrence of long-term fixed rate debt. At December 31, 2016 , 15.3% of our consolidated debt was variable rate debt, including the effects of interest rate hedges.

2016 Highlights and Other Recent Developments

Investments and Dispositions

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In September 2016, we completed the acquisition of substantially all of the university affiliated life science and innovation real estate assets of Wexford Science & Technology, LLC (“Wexford”) from affiliates of Blackstone Real Estate Partners VIII, L.P. (together with its affiliates, “Blackstone”) (the “Life Sciences Acquisition”) for total consideration of $1.5 billion . The Life Sciences Acquisition added to our portfolio 23 operating properties, two development assets and nine future development sites.

•


•	During 2016, we made a $140.0 million secured mezzanine loan investment relating to Class A life sciences properties in California and Massachusetts, that has an annual interest rate of 9.95% , and we acquired two MOBs, one triple-net leased seniors housing asset and other investments for approximately $42.3 million .


•	During the year ended December 31, 2016, we sold 29 triple-net leased properties, 1 seniors housing community included in our senior living operations reportable business segment and six MOBs for aggregate consideration of $300.8 million . We recognized a gain on the sales of these assets of $98.2 million (net of taxes).


•	During 2016, we received aggregate proceeds of $309.0 million in final repayment of three secured loans receivable and partial repayment of one secured loan receivable and recognized gains of $9.6 million on the repayment of these loans receivable.

Capital and Dividends


•	During 2016, we issued and sold 18.9 million shares of common stock under our “at-the-market” (“ATM”) equity offering program and public offerings. Aggregate net proceeds for these activities were $1.3 billion , after sales agent commissions.


•	In May 2016, we repaid $100.0 million outstanding on our unsecured term loan due 2019 using cash on hand.


•	In May 2016, we issued and sold $400.0 million aggregate principal amount of 3.125% senior notes due 2023 at a public offering price equal to 99.343% of par, for total proceeds of $397.4 million before the underwriting discount and expenses.


•	In June 2016, we redeemed $455.5 million aggregate principal amount then outstanding of our 1.55% senior notes due September 2016 at a public offering price of 100.335% of par, plus accrued and unpaid interest to the redemption date. In July 2016, we repaid the remaining balance then outstanding of our 1.55% senior notes due September 2016.


•	In September 2016, we issued and sold $450.0 million aggregate principal amount of 3.25% senior notes due 2026 at a public offering price equal to 99.811% of par, for total proceeds of $449.1 million before the underwriting discount and expenses.


•	In 2016, we paid an annual cash dividend on our common stock of $2.965 per share. In December 2016, our fourth quarter 2016 dividend grew by 6% over third quarter 2016 to $0.775.

Portfolio

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Critical Accounting Policies and Estimates

Our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”). GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. We believe that the critical accounting policies described below, among others, affect our more significant estimates and judgments used in the preparation of our financial statements. For more information regarding our critical accounting policies, see “ NOTE 2—ACCOUNTING POLICIES ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Principles of Consolidation

The Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis.

As it relates to investments in joint ventures, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner(s). We assess limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding limited partnership interests. We also apply this guidance to managing member interests in limited liability companies.

On January 1, 2016, we adopted Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis (“ASU 2015-02”), which makes certain changes to both the variable interest and voting models. The adoption of ASU 2015-02 did not result in any changes to our conclusions regarding the consolidation of investments under the new standard. We identified several entities already consolidated under the previous standard but not considered VIEs, which under the new standard are considered VIEs and will continue to be consolidated.

Business Combinations

We account for acquisitions using the acquisition method and record the cost of the businesses acquired among tangible and recognized intangible assets and liabilities based upon their estimated fair values as of the acquisition date. Recognized intangibles primarily include the value of in-place leases, acquired lease contracts, tenant and customer relationships, trade names/trademarks and goodwill. We do not amortize goodwill, which represents the excess of the purchase price paid over the fair value of the net assets of the acquired business.

Our method for recording the purchase price to acquired investments in real estate requires us to make subjective assessments for determining fair value of the assets acquired and liabilities assumed. This includes determining the value of the buildings, land and improvements, construction in progress, ground leases, tenant improvements, in-place leases, above and/or below market leases, purchase option intangible assets and/or liabilities, and any debt assumed. These estimates require significant judgment and in some cases involve complex calculations. These assessments directly impact our results of operations, as amounts estimated for certain assets and liabilities have different depreciation or amortization lives. In addition, we amortize the value assigned to above and/or below market leases as a component of revenue, unlike in-place leases and other intangibles, which we include in depreciation and amortization in our Consolidated Statements of Income.

We estimate the fair value of buildings acquired on an as-if-vacant basis, or replacement cost basis, and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analysis of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.

The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above and/or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized lease-related intangibles associated with that lease in operations at that time.

We estimate the fair value of purchase option intangible assets and liabilities by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability upon sale.

We estimate the fair value of tenant or other customer relationships acquired, if any, by considering the nature and extent of existing business relationships with the tenant or customer, growth prospects for developing new business with the tenant or customer, the tenant’s credit quality, expectations of lease renewals with the tenant, and the potential for significant, additional future leasing arrangements with the tenant, and we amortize that value over the expected life of the associated arrangements or leases, including the remaining terms of the related leases and any expected renewal periods. We estimate the fair value of trade names and trademarks using a royalty rate methodology and amortize that value over the estimated useful life of the trade name or trademark.

In connection with a business combination, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable relative to market conditions on the acquisition date, we recognize an intangible asset or liability, as applicable, at fair value and amortize that asset or liability (excluding purchase option intangibles) to interest or rental expense in our Consolidated Statements of Income over the applicable lease term. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

We determine the fair value of loans receivable acquired in connection with a business combination by discounting the estimated future cash flows using current interest rates at which similar loans on the same terms with the same length to maturity would be made to borrowers with similar credit ratings. We do not establish a valuation allowance at the acquisition date because the estimated future cash flows already reflect our judgment regarding their uncertainty. We recognize the difference between the acquisition date fair value and the total expected cash flows as interest income using an effective interest method over the life of the applicable loan. Subsequent to the acquisition date, we evaluate changes regarding the uncertainty of future cash flows and the need for a valuation allowance, as appropriate.

We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.

We calculate the fair value of long-term debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.

Impairment of Long-Lived and Intangible Assets

We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of leased properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize an impairment loss at the time we make any such determination.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

We evaluate our investments in unconsolidated entities for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying value of our investment may exceed its fair value. If we determine that a decline in the fair value of our investment in an unconsolidated entity is other-than-temporary, and if such reduced fair value is below the carrying value, we record an impairment.

We test goodwill for impairment at least annually, and more frequently if indicators arise. We first assess qualitative factors, such as current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance, to determine the likelihood that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we proceed with the two-step approach to evaluating impairment. First, we estimate the fair value of the reporting unit and compare it to the reporting unit’s carrying value. If the carrying value exceeds fair value, we proceed with the second step, which requires us to assign the fair value of the reporting unit to all of the assets and liabilities of the reporting unit as if it had been acquired in a business combination at the date of the impairment test. The excess fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied value of goodwill and is used to determine the amount of impairment. We recognize an impairment loss to the extent the carrying value of goodwill exceeds the implied value in the current period.

Estimates of fair value used in our evaluation of goodwill (if necessary based on our qualitative assessment), investments in real estate, investments in unconsolidated entities and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data. Our ability to accurately predict future operating results and cash flows and to estimate and allocate fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

Fair Value

Fair value is a market-based measurement, not an entity-specific measurement, and we determine fair value based on the assumptions that we expect market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one inputs utilize unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. Level two inputs consist of inputs other than quoted prices included in level one that are directly or indirectly observable for the asset or liability. Level two inputs may include quoted prices for similar assets and liabilities in active markets and other inputs for the asset or liability that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates and yield curves. Level three inputs are unobservable inputs for the asset or liability, which typically are based on our own assumptions, as there is little, if any, related market activity. If the determination of the fair value

measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. If the volume and level of market activity for an asset or liability has decreased significantly relative to the normal market activity for such asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that a transaction for an asset or liability is not orderly, little, if any, weight is placed on that transaction price as an indicator of fair value. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Revenue Recognition

Triple-Net Leased Properties and Office Operations

Certain of our triple-net leases and most of our MOB and life science and innovation center (collectively, “office operations”) leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our Consolidated Balance Sheets.

Certain of our leases provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met. We recognize the increased rental revenue under these leases as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term.

Senior Living Operations

We recognize resident fees and services, other than move-in fees, monthly as services are provided. We recognize move-in fees on a straight-line basis over the average resident stay. Our lease agreements with residents generally have terms of 12 to 18 months and are cancelable by the resident upon 30 days’ notice.

Other

We recognize interest income from loans and investments, including discounts and premiums, using the effective interest method when collectibility is reasonably assured. We apply the effective interest method on a loan-by-loan basis and recognize discounts and premiums as yield adjustments over the related loan term. We recognize interest income on an impaired loan to the extent our estimate of the fair value of the collateral is sufficient to support the balance of the loan, other receivables and all related accrued interest. When the balance of the loan, other receivables and all related accrued interest is equal to or less than our estimate of the fair value of the collateral, we recognize interest income on a cash basis. We provide a reserve against an impaired loan to the extent our total investment in the loan exceeds our estimate of the fair value of the loan collateral.

We recognize income from rent, lease termination fees, development services, management advisory services, and all other income when all of the following criteria are met in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 104: (i) the applicable agreement has been fully executed and delivered; (ii) services have been rendered; (iii) the amount is fixed or determinable; and (iv) collectibility is reasonably assured.

Allowances

We assess the collectibility of our rent receivables, including straight-line rent receivables. We base our assessment of the collectibility of rent receivables (other than straight-line rent receivables) on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, if any, and current economic conditions. If our evaluation of these factors indicates it is probable that we will be unable to recover the full value of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. We also base our assessment of the collectibility of straight-line rent receivables on several factors, including, among other things, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant and the type of property. If our evaluation of these factors indicates it is probable that we will be unable to receive the rent payments due in the future, we provide a reserve against the recognized straight-line rent receivable asset for the portion, up to its full value, that we estimate may not be recovered. If we change our assumptions or estimates regarding the collectibility of future rent payments required by a lease, we may adjust our reserve to increase or reduce the rental revenue recognized in the period we make such change in our assumptions or estimates.

Federal Income Tax

We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), for every year beginning with the year ended December 31, 1999. Accordingly, we generally are not subject to federal income tax on net income that we distribute to our stockholders, provided that we continue to qualify as a REIT. However, with respect to certain of our subsidiaries that have elected to be treated as “taxable REIT subsidiaries” (“TRSs”), we record income tax expense or benefit, as those entities are subject to federal income tax similar to regular corporations. Certain foreign subsidiaries are subject to foreign income tax, although they did not elect to be treated as TRSs.

We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes us to change our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.

We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Management considers the existing tax law and interpretations, court rulings and specific circumstances surrounding the tax position in order to make this determination. We recognize interest and penalties, if applicable, related to uncertain tax positions as part of income tax benefit (expense).

Recently Issued or Adopted Accounting Standards

On January 1, 2016, we adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”) to simplify the accounting for business combinations, specifically as it relates to measurement-period adjustments. Acquiring entities in a business combination must recognize measurement-period adjustments in the reporting period in which the adjustment amounts are determined. Also, ASU 2015-16 requires entities to present separately on the face of the income statement (or disclose in the notes to the financial statements) the portion of the amount recorded in the current period earnings, by line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Adoption of this ASU did not have a significant impact on our consolidated financial statements.

On January 1, 2017 we adopted ASU 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”) which narrows the FASB’s definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. If this initial test is not met, a set cannot be considered a business unless it includes an acquired input and a substantive process that together significantly contribute to the ability to create outputs. This ASU is to be applied prospectively and we expect that certain of our future real estate acquisitions will be accounted for as asset acquisitions in accordance with ASC 805, which provides for the capitalization of transaction costs and no recognition of goodwill.

On January 1, 2017 we adopted ASU 2016-09, Compensation - Stock Compensation (“ASU 2016-09”) which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. Adoption of this ASU is not expected to have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which introduces a lessee model that brings most leases on the balance sheet and amongst other changes, eliminates the requirement in current GAAP for an entity to use bright-line tests in determining lease classification. The amendments in ASU 2016-02 do not significantly change the current lessor accounting model. ASU 2016-02 is not effective for the Company until January 1, 2019 with early adoption permitted. We have begun our process for implementing this guidance, including developing an inventory of all leases as well as identifying any non-lease components in our lease arrangements. We are continuing to evaluate this guidance and the impact to us, as both lessor and lessee, on our consolidated financial statements.

In 2014, the FASB issued ASU 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the FASB provided for a one-year deferral of the effective date for ASU 2014-09, which is now effective for us beginning January 1, 2018. We have begun our process for implementing this guidance, including performing a preliminary review of all revenue streams to identify any differences in the timing, measurement of presentation of revenue recognition. We are continuing to evaluate ASU 2014-09 (and related clarifying guidance issued by the FASB) and the allowable methods of adoption; however, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which provides for an impairment model that is based on expected losses rather than incurred losses. Under ASU 2016-13, an entity recognizes as an allowance its estimate of expected credit losses. ASU 2016-13 is effective for the Company beginning January 1, 2020 and we do not expect its adoption will have a significant effect on our consolidated financial statements.

Results of Operations

As of December 31, 2016 , we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. In our triple-net leased properties segment, we acquire and own seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease, and manage MOBs and life science innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable. We evaluate performance of the combined properties in each reportable business segment based on segment NOI and related measures. For further information regarding our business segments and a discussion of our definition of segment NOI, see “ NOTE 19—SEGMENT INFORMATION ” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The historical results of operations of the CCP properties are presented as discontinued operations in the accompanying results of operations. Throughout this discussion, “continuing operations” does not include properties disposed of as part of the CCP Spin-Off.

Years Ended December 31, 2016 and 2015

The table below shows our results of operations for the years ended December 31, 2016 and 2015 and the effect of changes in those results from period to period on our net income attributable to common stockholders.



	For the Year Ended December 31,						Increase (Decrease) to Net Income
	2016			2015			$			%
	(Dollars in thousands)
Segment NOI:
Triple-Net Leased Properties	$	850,755		$	784,234		$	66,521		8.5	%
Senior Living Operations	604,328			601,840			2,488			0.4
Office Operations	444,276			399,891			44,385			11.1
All Other	101,214			89,176			12,038			13.5
Total segment NOI	2,000,573			1,875,141			125,432			6.7
Interest and other income	876			1,052			(176		)	(16.7	)
Interest expense	(419,740		)	(367,114		)	(52,626		)	(14.3	)
Depreciation and amortization	(898,924		)	(894,057		)	(4,867		)	(0.5	)
General, administrative and professional fees	(126,875		)	(128,035		)	1,160			0.9
Loss on extinguishment of debt, net	(2,779		)	(14,411		)	11,632			80.7
Merger-related expenses and deal costs	(24,635		)	(102,944		)	78,309			76.1
Other	(9,988		)	(17,957		)	7,969			44.4
Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest	518,508			351,675			166,833			47.4
Income (loss) from unconsolidated entities	4,358			(1,420		)	5,778			nm
Income tax benefit	31,343			39,284			(7,941		)	(20.2	)
Income from continuing operations	554,209			389,539			164,670			42.3
Discontinued operations	(922		)	11,103			(12,025		)	nm
Gain on real estate dispositions	98,203			18,580			79,623			nm
Net income	651,490			419,222			232,268			55.4
Net income attributable to noncontrolling interest	2,259			1,379			(880		)	(63.8	)
Net income attributable to common stockholders	$	649,231		$	417,843		231,388			55.4

nm—not meaningful

Segment NOI—Triple-Net Leased Properties

NOI for our triple-net leased properties reportable business segment equals the rental income and other services revenue earned from our triple-net assets. We incur no direct operating expenses for this segment.

The following table summarizes results of operations in our triple-net leased properties reportable business segment, including assets sold or classified as held for sale as of December 31, 2016 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,				Increase (Decrease) to Segment NOI
	2016		2015		$		%
	(Dollars in thousands)
Segment NOI—Triple-Net Leased Properties:
Rental income	$	845,834	$	779,801	$	66,033	8.5	%
Other services revenue	4,921		4,433		488		11.0
Segment NOI	$	850,755	$	784,234	66,521		8.5

Triple-net leased properties segment NOI increased in 2016 over the prior year primarily due to rent from the properties we acquired and developed during 2016 and 2015 , contractual escalations in rent pursuant to the terms of our leases, and increases in base and other rent under certain of our leases, partially offset by 2015 lease termination fees.

In our triple-net leased properties segment, our revenues generally consist of fixed rental amounts (subject to annual contractual escalations) received from our tenants in accordance with the applicable lease terms. However, occupancy rates may affect the profitability of our tenants’ operations. The following table sets forth average continuing occupancy rates related to the triple-net leased properties we owned at December 31, 2016 for the trailing 12 months ended September 30, 2016 (which is the most recent information available to us from our tenants) and average continuing occupancy rates related to the triple-net leased properties we owned at December 31, 2015 for the trailing 12 months ended September 30, 2015 .



	Number of Properties at December 31, 2016 ⁽¹⁾	Average Occupancy for the Trailing 12 Months Ended September 30, 2016 ⁽¹⁾		Number of Properties at December 31, 2015 ⁽¹⁾	Average Occupancy for the Trailing 12 Months Ended September 30, 2015 ⁽¹⁾
Seniors Housing Communities	431	88.2	%	453	88.2	%
Skilled Nursing Facilities	53	79.9		53	81.4
Specialty Hospitals	38	59.1		46	57.8

⁽¹⁾

Excludes properties included in discontinued operations during 2015 and properties classified as held for sale as of December 31, 2016 , non-stabilized properties, properties owned through investments in unconsolidated entities and certain properties for which we do not receive occupancy information. Also excludes properties acquired during the years ended December 31, 2016 and 2015 , respectively, including properties acquired as part of the 2015 AHS acquisition, and properties that transitioned operators for which we do not have eight full quarters of results subsequent to the transition.

The following table compares results of operations for our 511 same-store triple-net leased properties, unadjusted for foreign currency movements between comparison periods. With regard to our triple-net leased properties segment, “same-store” refers to properties that we owned for the full period in both comparison periods, excluding assets sold or classified as held for sale as of December 31, 2016 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,				Increase (Decrease) to Segment NOI
	2016		2015		$		%
	(Dollars in thousands)
Same-Store Segment NOI—Triple-Net Leased Properties:
Rental income	$	695,124	$	673,706	$	21,418	3.2	%
Other services revenue	4,921		4,433		488		11.0
Segment NOI	$	700,045	$	678,139	21,906		3.2

Segment NOI—Senior Living Operations

The following table summarizes results of operations in our senior living operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2016 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2016			2015			$			%
	(Dollars in thousands)
Segment NOI—Senior Living Operations:
Total revenues	$	1,847,306		$	1,811,255		$	36,051		2.0	%
Less:
Property-level operating expenses	(1,242,978		)	(1,209,415		)	(33,563		)	(2.8	)
Segment NOI	$	604,328		$	601,840		2,488			0.4



	Number of Properties at December 31,		Average Unit Occupancy for the Year Ended December 31,				Average Monthly Revenue Per Occupied Room for the Year Ended December 31,
	2016	2015	2016		2015		2016		2015
Total communities	298	305	90.3	%	91.2	%	$	5,474	$	5,255

Revenues attributed to our senior living operations segment consist of resident fees and services, which include all amounts earned from residents at our seniors housing communities, such as rental fees related to resident leases, extended health care fees and other ancillary service income. Our senior living operations segment revenues increased in 2016 over the prior year primarily due to seniors housing communities we acquired during 2015 and an increase in average monthly revenue per occupied room, partially offset by decreased occupancy at our seniors housing communities.

Property-level operating expenses related to our senior living operations segment include labor, food, utilities, marketing, management and other costs of operating the properties. Property-level operating expenses also increased year over year primarily due to the acquired properties described above and increases in salaries, bonus, benefits, insurance, real estate tax expenses and other operating expenses.

The following table compares results of operations for our 262 same-store senior living operating communities, unadjusted for foreign currency movements between periods. With regard to our senior living operations segment, “same-store” refers to properties that we owned and were operational for the full period in both comparison periods, excluding properties that transitioned operators since the start of the prior comparison period, assets sold or classified as held for sale as of December 31, 2016 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2016			2015			$			%
	(Dollars in thousands)
Same-Store Segment NOI—Senior Living Operations:
Total revenues	$	1,667,279		$	1,617,757		$	49,522		3.1	%
Less:
Property-level operating expenses	(1,116,109		)	(1,077,510		)	(38,599		)	(3.6	)
Segment NOI	$	551,170		$	540,247		10,923			2.0



	Number of Properties at December 31,		Average Unit Occupancy for the Year Ended December 31,		Average Monthly Revenue Per Occupied Room for the Year Ended December 31,
	2016	2015	2016	2015	2016	2015
Same-store communities	262	262	90.4	91.1	5,578	5,379

Segment NOI—Office Operations

The following table summarizes results of operations in our office operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2016 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2016			2015			$			%
	(Dollars in thousands)
Segment NOI—Office Operations:
Rental income	$	630,342		$	566,245		$	64,097		11.3	%
Office building services revenue	13,029			34,436			(21,407		)	(62.2	)
Total revenues	643,371			600,681			42,690			7.1
Less:
Property-level operating expenses	(191,784		)	(174,225		)	(17,559		)	(10.1	)
Office building services costs	(7,311		)	(26,565		)	19,254			72.5
Segment NOI	$	444,276		$	399,891		44,385			11.1



	Number of Properties at December 31,		Occupancy at December 31,				Annualized Average Rent Per Occupied Square Foot for the Year Ended Ended December 31,
	2016	2015	2016		2015		2016		2015
Total office buildings	388	369	91.7	%	91.7	%	$	31	$	29

The increase in our office operations segment rental income in 2016 over the prior year is attributed primarily to the MOBs we acquired during 2016 and 2015 and the Life Sciences Acquisition, as well as in place lease escalations. The increase in our office building property-level operating expenses is due primarily to those acquired MOBs and life science and innovation centers and increases in real estate taxes and other operating expenses.

Office building services revenue and costs both decreased in 2016 over the prior year primarily due to decreased construction activity during 2016 compared to 2015 .

The following table compares results of continuing operations for our 272 same-store office buildings. With regard to our office operations segment, “same-store” refers to properties that we owned for the full period in both comparison periods, excluding assets sold or classified as held for sale as of December 31, 2016 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2016			2015			$			%
	(Dollars in thousands)
Same-Store Segment NOI—Office Operations:
Rental income	$	432,657		$	434,022		$	(1,365	)	(0.3	)%
Less:
Property-level operating expenses	(142,826		)	(144,218		)	1,392			1.0
Segment NOI	$	289,831		$	289,804		27			0.0



	Number of Properties at December 31,		Occupancy at December 31,		Annualized Average Rent Per Occupied Square Foot for the Year Ended December 31,
	2016	2015	2016	2015	2016	2015
Same-store office buildings	272	272	90.6	91.2	31	31

Segment NOI—All Other

All other NOI consists solely of income from loans and investments. Income from loans and investments increased in 2016 over the prior year due primarily to a February 2016 $140.0 million secured mezzanine loan investment that has an annual interest rate of 9.95% , partially offset by decreased interest income due to loans repaid during 2016.

Interest Expense

The $7.8 million decrease in total interest expense, including interest allocated to discontinued operations of $60.4 million for the year ended December 31, 2015, is attributed primarily to a $11.5 million reduction in interest due to lower debt balances, partially offset by a $3.7 million increase due to higher effective interest rates, including the amortization of any fair value adjustments. Our effective interest rate was 3.63% for 2016 , compared to 3.60% for 2015 .

Loss on Extinguishment of Debt, Net

The loss on extinguishment of debt, net in 2016 and 2015 resulted primarily from various debt repayments we made to improve our credit profile. The 2016 activity related to the redemption and repayment of the $550.0 million aggregate principal amount then outstanding of our 1.55% senior notes due 2016 and term loan repayments. The 2015 repayments were made primarily with proceeds from the distribution paid to us at the time of the CCP Spin-Off.

Merger-Related Expenses and Deal Costs

Merger-related expenses and deal costs in both years consist of transition, integration, deal and severance-related expenses primarily related to pending and consummated transactions required by GAAP to be expensed rather than capitalized into the asset value. The $78.3 million decrease in merger-related expenses and deal costs in 2016 over the prior year is primarily due to the January 2015 HCT acquisition and the August 2015 acquisition of Ardent Health Services, Inc., partially offset by costs incurred relating to the September 2016 Life Sciences Acquisition.

Income Tax Benefit

Income tax benefit for 2016 was due primarily to losses of certain taxable REIT subsidiaries (“TRS entities”), the reversal of a net deferred tax liability at one TRS and the release of a tax reserve. Income tax benefit for 2015 was due primarily to the income tax benefit of ordinary losses of certain TRS entities. The TRS losses were mainly attributable to the depreciation and amortization of fixed and intangible assets recorded as deferred tax liabilities in purchase accounting.

Discontinued Operations

Discontinued operations for 2016 reflects $0.9 million of separation costs relating to the CCP Spin-Off. Discontinued operations for 2015 are primarily the result of $46.4 million of transaction and separation costs associated with the CCP Spin-Off and net income for the CCP operations from January 1, 2015 through August 17, 2015, the date of the CCP Spin-Off.

Gain on Real Estate Dispositions

The $79.6 million increase in gain on real estate dispositions in 2016 over the same period in 2015 primarily relates to the 2016 sale of one triple-net leased property.

Years Ended December 31, 2015 and 2014

The table below shows our results of operations for the years ended December 31, 2015 and 2014 and the effect of changes in those results from period to period on our net income attributable to common stockholders.



	For the Year Ended December 31,						Increase (Decrease) to Net Income
	2015			2014			$			%
	(Dollars in thousands)
Segment NOI:
Triple-Net Leased Properties	$	784,234		$	679,112		$	105,122		15.5	%
Senior Living Operations	601,840			516,395			85,445			16.5
Office Operations	399,891			310,515			89,376			28.8
All Other	89,176			54,048			35,128			65.0
Total segment NOI	1,875,141			1,560,070			315,071			20.2
Interest and other income	1,052			4,263			(3,211		)	(75.3	)
Interest expense	(367,114		)	(292,065		)	(75,049		)	(25.7	)
Depreciation and amortization	(894,057		)	(725,216		)	(168,841		)	(23.3	)
General, administrative and professional fees	(128,035		)	(121,738		)	(6,297		)	(5.2	)
Loss on extinguishment of debt, net	(14,411		)	(5,564		)	(8,847		)	nm
Merger-related expenses and deal costs	(102,944		)	(43,304		)	(59,640		)	nm
Other	(17,957		)	(25,743		)	7,786			30.2
Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest	351,675			350,703			972			0.3
Loss from unconsolidated entities	(1,420		)	(139		)	(1,281		)	nm
Income tax benefit	39,284			8,732			30,552			nm
Income from continuing operations	389,539			359,296			30,243			8.4
Discontinued operations	11,103			99,735			(88,632		)	(88.9	)
Gain on real estate dispositions	18,580			17,970			610			3.4
Net income	419,222			477,001			(57,779		)	(12.1	)
Net income attributable to noncontrolling interest	1,379			1,234			(145		)	(11.8	)
Net income attributable to common stockholders	$	417,843		$	475,767		(57,924		)	(12.2	)

nm—not meaningful

Segment NOI—Triple-Net Leased Properties

The following table summarizes results of operations in our triple-net leased properties reportable business segment, including assets sold or classified as held for sale as of December 31, 2015 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,				Increase to Segment NOI
	2015		2014		$			%
	(Dollars in thousands)
Segment NOI—Triple-Net Leased Properties:
Rental income	$	779,801	$	674,547	$	105,254		15.6	%
Other services revenue	4,433		4,565		(132		)	(2.9	)
Segment NOI	$	784,234	$	679,112	105,122			15.5

Triple-net leased properties segment NOI increased in 2015 over the prior year primarily due to rent from the properties we acquired during 2015 and 2014, contractual escalations in rent pursuant to the terms of our leases, and increases in base and other rent under certain of our leases.

The following table compares results of operations for our 481 same-store triple-net leased properties, unadjusted for foreign currency movements between comparison periods. With regard to our triple-net leased properties segment, “same-store” refers to properties that we owned for the full period in both comparison periods, excluding assets sold or classified as held for sale as of December 31, 2015 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,				Increase (Decrease) to Segment NOI
	2015		2014		$			%
	(Dollars in thousands)
Same-Store Segment NOI—Triple-Net Leased Properties:
Rental income	$	625,711	$	598,858	$	26,853		4.5	%
Other services revenue	4,433		4,565		(132		)	(2.9	)
Segment NOI	$	630,144	$	603,423	26,721			4.4

Segment NOI—Senior Living Operations

The following table summarizes results of operations in our senior living operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2015 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2015			2014			$			%
	(Dollars in thousands)
Segment NOI—Senior Living Operations:
Total revenues	$	1,811,255		$	1,552,951		$	258,304		16.6	%
Less:
Property-level operating expenses	(1,209,415		)	(1,036,556		)	(172,859		)	(16.7	)
Segment NOI	$	601,840		$	516,395		85,445			16.5



	Number of Properties at December 31,		Average Unit Occupancy for the Year Ended December 31,				Average Monthly Revenue Per Occupied Room for the Year Ended December 31,
	2015	2014	2015		2014		2015		2014
Total communities	305	270	91.2	%	91.1	%	$	5,255	$	5,407

Our senior living operations segment revenues increased in 2015 over the prior year primarily due to seniors housing communities we acquired during 2015 and 2014, including the 2015 HCT acquisition and the 2014 acquisition of 29 seniors housing communities located in Canada from Holiday Retirement (the “Holiday Canada Acquisition”).

Property-level operating expenses also increased year over year primarily due to the acquired properties described above, increases in salaries, repairs and maintenance costs, real estate taxes and higher management fees primarily due to increased revenues, partially offset by decreased incentive fees payable to our operators and property insurance costs.

The following table compares results of operations for our 229 same-store senior living operating communities, unadjusted for foreign currency movements between periods. With regard to our senior living operations segment, “same-store” refers to properties that we owned and were operational for the full period in both comparison periods, excluding properties that transitioned operators since the start of the prior comparison period, assets sold or classified as held for sale as of December 31, 2015 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2015			2014			$			%
	(Dollars in thousands)
Same-Store Segment NOI—Senior Living Operations:
Total revenues	$	1,486,751		$	1,449,603		$	37,148		2.6	%
Less:
Property-level operating expenses	(1,004,126		)	(973,401		)	(30,725		)	(3.2	)
Segment NOI	$	482,625		$	476,202		6,423			1.3



	Number of Properties at December 31,		Average Unit Occupancy for the Year Ended December 31,		Average Monthly Revenue Per Occupied Room for the Year Ended December 31,
	2015	2014	2015	2014	2015	2014
Same-store communities	229	229	91.0	91.0	5,800	5,660

Segment NOI—Office Operations

The following table summarizes results of operations in our office operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2015 , but excluding assets whose operations were classified as discontinued operations:



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2015			2014			$			%
	(Dollars in thousands)
Segment NOI—Office Operations:
Rental income	$	566,245		$	463,910		$	102,335		22.1	%
Office building services revenue	34,436			22,529			11,907			52.9
Total revenues	600,681			486,439			114,242			23.5
Less:
Property-level operating expenses	(174,225		)	(158,832		)	(15,393		)	(9.7	)
Office building services costs	(26,565		)	(17,092		)	(9,473		)	(55.4	)
Segment NOI	$	399,891		$	310,515		89,376			28.8



	Number of Properties at December 31,		Occupancy at December 31,				Annualized Average Rent Per Occupied Square Foot for the Year Ended December 31,
	2015	2014	2015		2014		2015		2014
Total office buildings	369	311	91.4	%	91.7	%	$	29	$	30

The increase in our office operations segment rental income in 2015 over the prior year is attributed primarily to the MOBs we acquired during 2015 and 2014 as well as same-store revenue growth and an increase in lease termination fees. The increase in our office building property-level operating expenses is due primarily to those acquired MOBs and increases in cleaning, administrative wages and real estate tax expenses, partially offset by decreases in operating costs resulting from expense controls.

Office building services revenue and costs both increased in 2015 over the prior year primarily due to increased construction activity during 2015 compared to 2014. Management fee revenue also increased due to insourcing completed during 2014 and 2015.

The following table compares results of operations for our 270 same-store office buildings. With regard to our office operations segment, “same-store” refers to properties that we owned for the full period in both comparison periods, excluding assets sold or classified as held for sale as of December 31, 2015 and assets whose operations were classified as discontinued operations.



	For the Year Ended December 31,						Increase (Decrease) to Segment NOI
	2015			2014			$			%
	(Dollars in thousands)
Same-Store Segment NOI—Office Operations:
Rental income	$	432,652		$	429,670		$	2,982		0.7	%
Less:
Property-level operating expenses	(144,149		)	(143,763		)	(386		)	(0.3	)
Segment NOI	$	288,503		$	285,907		2,596			0.9



	Number of Properties at December 31,		Occupancy at December 31,		Annualized Average Rent Per Occupied Square Foot for the Year Ended December 31,
	2015	2014	2015	2014	2015	2014
Same-store office buildings	270	270	91.2	91.5	31	31

Segment NOI—All Other

All other NOI consists solely of income from loans and investments. Income from loans and investments increased in 2015 over the prior year due primarily to higher investment balances and prepayment income during 2015, partially offset by lower weighted average interest rates on loan balances in 2015 compared to 2014.

Interest Expense

The $49.0 million increase in total interest expense, including interest allocated to discontinued operations of $60.4 million and $86.5 million for the years ended December 31, 2015 and 2014 , respectively, is attributed primarily to $53.6 million of additional interest due to higher debt balances, partially offset by a $6.5 million reduction in interest due to lower effective interest rates, including the amortization of any fair value adjustments. Our effective interest rate was 3.6% for 2015 , compared to 3.7% for 2014 .

Depreciation and Amortization

Depreciation and amortization expense increased $168.8 million in 2015 primarily due to real estate acquisitions we made in 2014 and 2015.

General, Administrative and Professional Fees

General, administrative and professional fees increased $6.3 million in 2015 primarily due to our increased employee head count as a result of organizational growth, partially offset by savings related to the CCP Spin-Off.

Loss on Extinguishment of Debt, Net

The loss on extinguishment of debt, net in 2015 and 2014 resulted primarily from various debt repayments we made to improve our credit profile. The 2015 repayments were made primarily with proceeds from the distribution paid to us at the time of the CCP Spin-Off.

Merger-Related Expenses and Deal Costs

into the asset value. The $59.6 million increase in merger-related expenses and deal costs in 2015 over the prior year is primarily due to increased 2015 investment activity and costs related to the CCP Spin-Off.

Income Tax Benefit

Income tax benefit for 2015 was due primarily to the income tax benefit of ordinary losses of certain TRS entities. The TRS losses were mainly attributable to the depreciation and amortization of fixed and intangible assets recorded as deferred tax liabilities in purchase accounting. Income tax benefit for 2014 was due primarily to the income tax benefit of ordinary losses and the reversal of a net deferred tax liability at one TRS.

Discontinued Operations

Discontinued operations primarily relates to the operations of assets and liabilities disposed of as part of the CCP Spin-Off. The decrease in income from discontinued operations for 2015 compared to 2014 is primarily the result of $46.4 million of transaction and separation costs associated with the spin-off. Also, 2014 includes a full year of net income for the CCP operations, whereas 2015 only includes net income through August 17, 2015, the date of the CCP Spin-Off.

Non-GAAP Financial Measures

We consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not so excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.

The non-GAAP financial measures we present in this Annual Report on Form 10-K may not be comparable to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. You should not consider these measures as alternatives to net income or income from continuing operations (both determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine these measures in conjunction with net income and income from continuing operations as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.

Funds From Operations and Normalized Funds From Operations

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider Funds From Operations (“FFO”) and normalized FFO to be appropriate supplemental measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by non-recurring items and other non-operational events such as transactions and litigation. In some cases, we provide information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.

We use the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. NAREIT defines FFO as net income attributable to common stockholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property, including gains or losses on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of our debt; (c) the non-cash effect of income tax benefits or expenses, the non-cash impact of changes to our executive equity compensation plan and derivative transactions that have non-cash mark-to-market impacts on our

Consolidated Statements of Income; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other unusual items related to unconsolidated entities; and (g) expenses related to the re-audit and re-review in 2014 of our historical financial statements and related matters. We believe that income from continuing operations is the most comparable GAAP measure because it provides insight into our continuing operations.

The following table summarizes our FFO and normalized FFO for each of the five years ended December 31, 2016 . Our normalized FFO for the year ended December 31, 2016 decreased over the prior year due primarily to results in 2015 from the properties that were disposed of as part of the CCP Spin-Off, partially offset by 2015 and 2016 acquisitions, net of related capital costs, and an increase in income from loans and investments due to gains recognized on repayments we received during 2016 and a February 2016 $140.0 million secured mezzanine loan investment that has an annual interest rate of 9.95% .



	For the Year Ended December 31,
	2016			2015			2014			2013			2012
	(In thousands)
Income from continuing operations	$	554,209		$	389,539		$	359,296		$	375,498		$	200,815
Discontinued operations	(922		)	11,103			99,735			79,171			160,641
Gain on real estate dispositions	98,203			18,580			17,970			—			—
Net income	651,490			419,222			477,001			454,669			361,456
Net income attributable to noncontrolling interest	2,259			1,379			1,234			1,160			(1,344		)
Net income attributable to common stockholders	$	649,231		$	417,843		$	475,767		$	453,509		$	362,800
Adjustments:
Real estate depreciation and amortization	891,985			887,126			718,649			624,245			616,095
Real estate depreciation related to noncontrolling interest	(7,785		)	(7,906		)	(10,314		)	(10,512		)	(8,503		)
Real estate depreciation related to unconsolidated entities	5,754			7,353			5,792			6,543			7,516
(Gain) loss on real estate dispositions related to unconsolidated entities	(439		)	19			—			—			—
Loss (gain) on re-measurement of equity interest upon acquisition, net	—			176			—			(1,241		)	(16,645		)
Gain on real estate dispositions	(98,203		)	(18,580		)	(17,970		)	—			—
Discontinued operations:
Loss (gain) on real estate dispositions	1			(231		)	(1,494		)	(4,059		)	(80,952		)
Depreciation on real estate assets	—			79,608			103,250			139,973			144,256
FFO attributable to common stockholders	1,440,544			1,365,408			1,273,680			1,208,458			1,024,567
Adjustments:
Change in fair value of financial instruments	62			460			5,121			449			99
Non-cash income tax benefit	(34,227		)	(42,384		)	(9,431		)	(11,828		)	(6,286		)
Loss on extinguishment of debt, net	2,779			15,797			5,013			1,048			37,640
Gain on non-real estate dispositions related to unconsolidated entities	(557		)	—			—			—			—
Merger-related expenses, deal costs and re-audit costs	28,290			152,344			54,389			21,560			63,183
Amortization of other intangibles	1,752			2,058			1,246			1,022			1,022
Normalized FFO attributable to common stockholders	$	1,438,643		$	1,493,683		$	1,330,018		$	1,220,709		$	1,120,225

Adjusted EBITDA

We consider Adjusted EBITDA an important supplemental measure because it provides another manner in which to evaluate our operating performance and serves as another indicator of our credit strength and our ability to service our debt obligations. We define Adjusted EBITDA as consolidated earnings, which includes amounts in discontinued operations, before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, our consolidated joint venture partners’ share of EBITDA, merger-related expenses and deal costs, expenses related to the re-audit and re-review in 2014 of our historical financial statements, net gains or losses on real estate activity, gains or losses on re-measurement of equity interest upon acquisition, changes in the fair value of financial instruments and unrealized foreign currency gains or losses, and including our share of EBITDA from unconsolidated entities and adjustments for other immaterial or identified items. The following table sets forth a reconciliation of income from continuing operations to Adjusted EBITDA for the years ended December 31, 2016 , 2015 and 2014 :



	For the Year Ended December 31,
	2016			2015			2014
	(In thousands)
Income from continuing operations	$	554,209		$	389,539		$	359,296
Discontinued operations	(922		)	11,103			99,735
Gain on real estate dispositions	98,203			18,580			17,970
Net income	651,490			419,222			477,001
Net income attributable to noncontrolling interest	2,259			1,379			1,234
Net income attributable to common stockholders	649,231			417,843			475,767
Adjustments:
Interest	419,740			427,542			378,556
Loss on extinguishment of debt, net	2,779			14,411			5,564
Taxes (including amounts in general, administrative and professional fees)	(29,129		)	(37,112		)	(4,770		)
Depreciation and amortization	898,924			973,665			828,466
Non-cash stock-based compensation expense	20,958			19,537			20,994
Merger-related expenses, deal costs and re-audit costs	25,141			150,290			53,847
Net income (loss) attributable to noncontrolling interest, net of consolidated joint venture partners’ share of EBITDA	(12,654		)	(12,722		)	(13,499		)
(Income) loss from unconsolidated entities, net of Ventas share of EBITDA from unconsolidated entities	25,246			18,806			12,469
Gain on real estate dispositions	(98,202		)	(18,811		)	(19,183		)
Unrealized foreign currency (gains) losses	(1,440		)	(1,727		)	75
Changes in fair value of financial instruments	51			460			5,121
Gain on re-measurement of equity interest upon acquisition, net	—			176			—
Adjusted EBITDA	$	1,900,645		$	1,952,358		$	1,743,407

NOI

We also consider NOI an important supplemental measure because it allows investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results with those of other real estate companies and between periods on a consistent basis. We define NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. Cash receipts may differ due to straight-line recognition of certain rental income and the application of other GAAP policies. The following table sets forth a reconciliation of income from continuing operations to NOI for the years ended December 31, 2016 , 2015 and 2014 :



	For the Year Ended December 31,
	2016			2015			2014
	(In thousands)
Income from continuing operations	$	554,209		$	389,539		$	359,296
Discontinued operations	(922		)	11,103			99,735
Gain on real estate dispositions	98,203			18,580			17,970
Net income	651,490			419,222			477,001
Net income attributable to noncontrolling interest	2,259			1,379			1,234
Net income attributable to common stockholders	649,231			417,843			475,767
Adjustments:
Interest and other income	(876		)	(1,115		)	(5,017		)
Interest	419,740			427,542			378,556
Depreciation and amortization	898,924			973,665			828,466
General, administrative and professional fees	126,875			128,044			121,746
Loss on extinguishment of debt, net	2,779			14,411			5,564
Merger-related expenses and deal costs	25,556			149,346			45,051
Other	9,988			19,577			39,337
Net income attributable to noncontrolling interest	2,259			1,499			1,419
(Income) loss from unconsolidated entities	(4,358		)	1,420			139
Income tax benefit	(31,343		)	(39,284		)	(8,732		)
Gain on real estate dispositions	(98,202		)	(18,811		)	(19,183		)
NOI (including amounts in discontinued operations)	2,000,573			2,074,137			1,863,113
Discontinued operations	—			(198,996		)	(303,043		)
NOI (excluding amounts in discontinued operations)	$	2,000,573		$	1,875,141		$	1,560,070

Asset/Liability Management

Asset/liability management, a key element of enterprise risk management, is designed to support the achievement of our business strategy, while ensuring that we maintain appropriate and tolerable levels of market risk (primarily interest rate risk and foreign currency exchange risk) and credit risk. Effective management of these risks is a contributing factor to the absolute levels and variability of our FFO and net worth. The following discussion addresses our integrated management of assets and liabilities, including the use of derivative financial instruments.

Market Risk

We are exposed to market risk related to changes in interest rates with respect to borrowings under our unsecured revolving credit facility and our unsecured term loans, certain of our mortgage loans that are floating rate obligations, mortgage loans receivable that bear interest at floating rates and marketable debt securities. These market risks result primarily from changes in LIBOR rates or prime rates. To manage these risks, we continuously monitor our level of floating rate debt with respect to total debt and other factors, including our assessment of current and future economic conditions.

The table below sets forth certain information with respect to our debt, excluding premiums and discounts.



	As of December 31,
	2016			2015			2014
	(Dollars in thousands)
Balance:
Fixed rate:
Senior notes and other	$	7,854,264		$	7,534,459		$	6,677,875
Floating to fixed rate swap on term loan	200,000			—			—
Mortgage loans and other ⁽¹⁾	1,426,837			1,554,062			1,810,716
Variable rate:
Unsecured revolving credit facilities	146,538			180,683			919,099
Unsecured term loans, unhedged portion	1,271,215			1,568,477			990,634
Mortgage loans and other	292,060			433,339			474,047
Total	$	11,190,914		$	11,271,020		$	10,872,371
Percent of total debt:
Fixed rate:
Senior notes and other	70.2		%	66.9		%	61.4		%
Floating to fixed rate swap on term loan	1.8			—			—
Mortgage loans and other ⁽¹⁾	12.7			13.8			16.6
Variable rate:
Unsecured revolving credit facilities	1.3			1.6			8.5
Unsecured term loans, unhedged portion	11.4			13.9			9.1
Mortgage loans and other	2.6			3.8			4.4
Total	100.0		%	100.0		%	100.0		%
Weighted average interest rate at end of period:
Fixed rate:
Senior notes and other	3.6		%	3.5		%	3.5		%
Floating to fixed rate swap on term loan	2.2			—			—
Mortgage loans and other ⁽¹⁾	5.6			5.7			5.9
Variable rate:
Unsecured revolving credit facilities	1.9			1.4			1.4
Unsecured term loans, unhedged portion	1.7			1.4			1.3
Mortgage loans and other	2.1			2.0			2.3
Total	3.6			3.5			3.5


⁽¹⁾	Excludes mortgage debt of $22.9 million and $27.6 million related to real estate assets classified as held for sale as of December 31, 2015 and 2014 , respectively. All amounts were included in liabilities related to assets held for sale on our Consolidated Balance Sheets.

The variable rate debt in the table above reflects, in part, the effect of $150.8 million notional amount of interest rate swaps with a maturity of March 22, 2018 that effectively convert fixed rate debt to variable rate debt. In addition, the fixed rate debt in the table above reflects, in part, the effect of $236.5 million notional amount of interest rate swaps with maturities ranging from October 1, 2018 to August 3, 2020, in each case that effectively convert variable rate debt to fixed rate debt.

In February 2016, we entered into a $200 million notional amount interest rate swap with a maturity of August 3, 2020 that effectively converts LIBOR-based floating rate debt to fixed rate debt, setting LIBOR at 1.132% through the maturity date of the swap.

In July 2016, we entered into $225 million notional forward starting swaps that reduced our exposure to fluctuations in interest rates between July and the September issuance of 3.25% senior notes due 2026. On the issuance date, we realized a gain of $1.9 million from these swaps which will be recognized over the life of the notes using an effective interest method.

In January and February 2017, we entered into a total of $200 million of notional forward starting swaps with an effective date of April 3, 2017 that reduce our exposure to fluctuations in interest rates related to changes in rates between now and the forecasted issuance of long-term debt. The rate on the notional amounts is locked at a weighted average rate of 2.33% .

The decrease in our outstanding variable rate debt at December 31, 2016 compared to December 31, 2015 is primarily attributable to the $200 million notional amount interest rate swap that we entered into during the first quarter of 2016 that effectively converts LIBOR-based floating rate debt to fixed rate debt and 2016 term loan and mortgage repayments.

Pursuant to the terms of certain leases with one of our tenants, if interest rates increase on certain variable rate debt that we have totaling $80.0 million as of December 31, 2016 , our tenant is required to pay us additional rent (on a dollar-for-dollar basis) in an amount equal to the increase in interest expense resulting from the increased interest rates. Therefore, the increase in interest expense related to this debt is equally offset by an increase in additional rent due to us from the tenant. Assuming a 100 basis point increase in the weighted average interest rate related to our variable rate debt and assuming no change in our variable rate debt outstanding as of December 31, 2016 , interest expense for 2017 would increase by approximately $16.5 million , or $0.05 per diluted common share.

As of December 31, 2016 and 2015 , our joint venture partners’ aggregate share of total debt was $80.9 million and $94.5 million, respectively, with respect to certain properties we owned through consolidated joint ventures. Total debt does not include our portion of debt related to investments in unconsolidated entities, which was $122.0 million and $115.1 million as of December 31, 2016 and 2015 , respectively.

The fair value of our fixed and variable rate debt is based on current interest rates at which we could obtain similar borrowings. For fixed rate debt, interest rate fluctuations generally affect the fair value, but not our earnings or cash flows. Therefore, interest rate risk does not have a significant impact on our fixed rate debt obligations until their maturity or earlier prepayment and refinancing. If interest rates have risen at the time we seek to refinance our fixed rate debt, whether at maturity or otherwise, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of refinancing may reduce our overall borrowing costs.

To highlight the sensitivity of our fixed rate debt to changes in interest rates, the following summary shows the effects of a hypothetical instantaneous change of 100 basis points in interest rates as of December 31, 2016 and 2015 :



	As of December 31,
	2016		2015
	(In thousands)
Gross book value	$	9,481,101	$	9,088,521
Fair value ⁽¹⁾	9,600,621		9,170,508
Fair value reflecting change in interest rates ⁽¹⁾ :
-100 basis points	10,117,238		9,674,423
+100 basis points	9,133,292		8,708,963


⁽¹⁾	The change in fair value of our fixed rate debt from December 31, 2015 to December 31, 2016 was due primarily to changes in the fair market value interest rates, 2016 senior note issuances, net of repayments, and 2016 net reduction of fixed rate mortgage debt.

As of December 31, 2016 and 2015 , the fair value of our secured and non-mortgage loans receivable, based on our estimates of currently prevailing rates for comparable loans, was $709.6 million and $855.7 million , respectively. See “ NOTE 6—LOANS RECEIVABLE AND INVESTMENTS ” and “ NOTE 11—FAIR VALUES OF FINANCIAL INSTRUMENTS ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

As a result of our Canadian and United Kingdom operations, we are subject to fluctuations in certain foreign currency exchange rates that may, from time to time, affect our financial condition and operating performance. Based solely on our results for the year ended December 31, 2016 (including the impact of existing hedging arrangements), if the value of the U.S. dollar relative to the British pound and Canadian dollar were to increase or decrease by one standard deviation compared to the average exchange rate during the year, our normalized FFO per share for the year ended December 31, 2016 would decrease or increase, as applicable, by approximately $0.01 per share or less than 1%. We will continue to mitigate these risks through a layered approach to hedging looking out for the next year and continual assessment of our foreign operational capital structure. Nevertheless, we cannot assure you that any such fluctuations will not have an effect on our earnings.

During the year ended December 31, 2016 , the amount of foreign currency translation loss included in accumulated other comprehensive loss on our Consolidated Balance Sheets increased by $52.3 million , primarily as a result of the remeasurement of our properties located in the United Kingdom.

Concentration and Credit Risk

We use concentration ratios to identify, understand and evaluate the potential impact of economic downturns and other adverse events that may affect our asset types, geographic locations, business models, and tenants, operators and managers. We evaluate concentration risk in terms of investment mix and operations mix. Investment mix measures the percentage of our investments that is concentrated in a specific asset type or that is operated or managed by a particular tenant, operator or manager. Operations mix measures the percentage of our operating results that is attributed to a particular tenant, operator or manager, geographic location or business model. The following tables reflect our concentration risk as of the dates and for the periods presented:



	As of December 31,
	2016		2015
Investment mix by asset type ⁽¹⁾ :
Seniors housing communities	61.8	%	65.3	%
Medical office buildings	20.7		21.7
Life science and innovation centers	6.1		—
Skilled nursing facilities	1.4		1.5
Specialty hospitals	1.7		2.1
General acute care hospitals	5.6		5.9
Secured loans receivable and investments, net	2.7		3.5
Investment mix by tenant, operator and manager ⁽¹⁾ :
Atria	22.6	%	22.6	%
Sunrise	11.3		11.8
Brookdale Senior Living	8.1		8.5
Kindred	1.8		2.2
Ardent	5.1		5.3
All other	51.1		49.6


⁽¹⁾	Ratios are based on the gross book value of real estate investments (excluding properties classified as held for sale and properties owned through investments in unconsolidated entities) as of each reporting date.



	For the Year Ended December 31,
	2016		2015		2014
Operations mix by tenant and operator and business model:
Revenues ⁽¹⁾ :
Senior living operations	53.6	%	55.1	%	56.0	%
Kindred	5.4		5.7		5.9
Brookdale Senior Living ⁽²⁾	4.8		5.3		6.1
Ardent	3.1		1.3		—
All others	33.1		32.6		32.0
Adjusted EBITDA ⁽³⁾ :
Senior living operations	30.9	%	29.7	%	28.4	%
Kindred	8.9		8.8		10.2
Brookdale Senior Living ⁽²⁾	7.9		8.2		9.2
Ardent	5.1		2.0		—
All others	47.2		51.3		52.2
NOI ⁽⁴⁾ :
Senior living operations	30.2	%	32.1	%	33.1	%
Kindred	9.2		9.9		10.6
Brookdale Senior Living ⁽²⁾	8.3		9.3		10.9
Ardent	5.3		2.3		—
All others	47.0		46.4		45.4
Operations mix by geographic location ⁽⁵⁾ :
California	15.3	%	15.4	%	15.0	%
New York	8.8		8.8		9.6
Texas	6.3		6.1		6.9
Illinois	4.9		4.9		4.5
Florida	4.5		4.6		4.0
All others	60.2		60.2		60.0


⁽¹⁾	Total revenues include medical office building and other services revenue, revenue from loans and investments and interest and other income (excluding amounts in discontinued operations).


⁽²⁾	Excludes one seniors housing community included in senior living operations.


⁽³⁾	Includes amounts in discontinued operations.


⁽⁴⁾	Excludes amounts in discontinued operations.


⁽⁵⁾	Ratios are based on total revenues (excluding amounts in discontinued operations) for each period presented.

See “Non-GAAP Financial Measures” included elsewhere in this Annual Report on Form 10-K for additional disclosure and reconciliations of income from continuing operations to Adjusted EBITDA and NOI as computed in accordance with GAAP.

We derive a significant portion of our revenues by leasing assets under long-term triple-net leases in which the rental rate is generally fixed with annual escalators, subject to certain limitations. Some of our triple-net lease escalators are contingent upon the satisfaction of specified facility revenue parameters or based on increases in the Consumer Price Index (“CPI”), with caps, floors or collars. We also earn revenues directly from individual residents in our seniors housing communities that are managed by independent operators, such as Atria and Sunrise, and tenants in our MOBs. For the year ended December 31, 2016 , 52.3% of our Adjusted EBITDA (including amounts in discontinued operations) was derived from our senior living operations and office operations, for which rental rates may fluctuate more frequently upon lease rollovers and renewals due to shorter term leases and changing economic or market conditions.

The concentration of our triple-net leased properties segment revenues and operating income that are attributed to Brookdale Senior Living, Kindred and Ardent creates credit risk. If either Brookdale Senior Living, Kindred or Ardent becomes unable or unwilling to satisfy its obligations to us or to renew its leases with us upon expiration of the terms thereof, our

financial condition and results of operations could decline and our ability to service our indebtedness and to make distributions to our stockholders could be limited. We cannot assure you that Brookdale Senior Living, Kindred and Ardent will have sufficient assets, income and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to do so could have a Material Adverse Effect on us. In addition, any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to effectively conduct its operations or to maintain and improve our properties could adversely affect its business reputation and its ability to attract and retain patients and residents in our properties, which could have an indirect Material Adverse Effect on us. See “Risk Factors—Risks Arising from Our Business—Our leases with Brookdale Senior Living, Kindred and Ardent account for a significant portion of our triple-net leased properties segment revenues and operating income; Any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to satisfy its obligations under our agreements could have a Material Adverse Effect on us” included in Part I, Item 1A of this Annual Report on Form 10-K and “ NOTE 3—CONCENTRATION OF CREDIT RISK ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

We regularly monitor and assess any changes in the relative credit risk of our significant tenants, and in particular those tenants that have recourse obligations under our triple-net leases. The ratios and metrics we use to evaluate a significant tenant’s liquidity and creditworthiness depend on facts and circumstances specific to that tenant and the industry or industries in which it operates, including without limitation the tenant’s credit history and economic conditions related to the tenant, its operations and the markets in which the tenant operates, that may vary over time. Among other things, we may (i) review and analyze information regarding the real estate, seniors housing and healthcare industries generally, publicly available information regarding the significant tenant, and information required to be provided by the tenant under the terms of its lease agreements with us, (ii) examine monthly and/or quarterly financial statements of the significant tenant to the extent publicly available or otherwise provided under the terms of our lease agreements, and (iii) participate in periodic discussions and in-person meetings with representatives of the significant tenant. Using this information, we calculate multiple financial ratios (which may, but do not necessarily, include net debt to EBITDAR or EBITDARM, fixed charge coverage and tangible net worth), after making certain adjustments based on our judgment, and assess other metrics we deem relevant to an understanding of the significant tenant’s credit risk.

Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants. However, we rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees and to otherwise operate our seniors housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. Although we have various rights as the property owner under our management agreements, including various rights to terminate and exercise remedies under the agreements as provided therein, Atria’s or Sunrise’s failure, inability or unwillingness to satisfy its respective obligations under those agreements, to efficiently and effectively manage our properties or to provide timely and accurate accounting information with respect thereto could have a Material Adverse Effect on us. In addition, significant changes in Atria’s or Sunrise’s senior management or equity ownership or any adverse developments in their businesses and affairs or financial condition could have a Material Adverse Effect on us. See “Risk Factors—Risks Arising from Our Business—The properties managed by Atria and Sunrise account for a significant portion of our revenues and operating income; Adverse developments in Atria’s or Sunrise’s business and affairs or financial condition could have a Material Adverse Effect on us” and “—We have rights to terminate our management agreements with Atria and Sunrise in whole or with respect to specific properties under certain circumstances, and we may be unable to replace Atria or Sunrise if our management agreements are terminated or not renewed” included in Part I, Item 1A of this Annual Report on Form 10-K.

Our 34% ownership interest in Atria entitles us to certain rights and minority protections, as well as the right to appoint two of six members on the Atria Board of Directors.

Triple-Net Lease Expirations

If our tenants are not able or willing to renew our triple-net leases upon expiration, we may be unable to reposition the applicable properties on a timely basis or on the same or better economic terms, if at all. Although our lease expirations are staggered, the non-renewal of some or all of our triple-net leases that expire in any given year could have a Material Adverse Effect on us. During the year ended December 31, 2016 , we had no triple-net lease renewals or expirations without renewal that, in the aggregate, had a material impact on our financial condition or results of operations for that period. See “Risk Factors—Risks Arising from Our Business—If we must replace any of our tenants or operators, we might be unable to reposition the properties on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could have a Material Adverse Effect on us” included in Part I, Item IA of this Annual Report on Form 10-K.

The following table summarizes our triple-net lease expirations currently scheduled to occur over the next ten years (excluding leases related to assets classified as held for sale as of December 31, 2016 ):



	Number of Properties	2016 Annual Rental Income		% of 2016 Total Triple-Net Leased Properties Segment Rental Income
	(Dollars in thousands)
2017	—	$	—	—	%
2018	2	1,989		0.2
2019	73	118,803		14.0
2020	47	35,347		4.2
2021	77	71,180		8.4
2022	35	41,066		4.9
2023	12	30,311		3.6
2024	36	22,424		2.7
2025	101	187,304		22.1
2026	30	41,749		4.9

Liquidity and Capital Resources

As of December 31, 2016 , we had a total of $286.7 million of unrestricted cash and cash equivalents, operating cash and cash related to our senior living operations and office operations reportable business segments that is deposited and held in property-level accounts. Funds maintained in the property-level accounts are used primarily for the payment of property-level expenses, debt service payments and certain capital expenditures. As of December 31, 2016 , we also had escrow deposits and restricted cash of $80.6 million and $1.8 billion of unused borrowing capacity available under our unsecured revolving credit facility.

During 2016 , our principal sources of liquidity were cash flows from operations, proceeds from the issuance of debt and equity securities, proceeds from asset sales and cash on hand. We used these proceeds to fund the September 2016 Life Sciences Acquisition for approximately $1.5 billion , and for working capital and other general corporate purposes.

For the next 12 months, our principal liquidity needs are to: (i) fund operating expenses; (ii) meet our debt service requirements; (iii) repay maturing mortgage and other debt, including $300.0 million of senior notes; (iv) fund capital expenditures; (v) fund acquisitions, investments and commitments, including development and redevelopment activities; and (vi) make distributions to our stockholders and unitholders, as required for us to continue to qualify as a REIT. In addition, we may elect to prepay outstanding indebtedness prior to maturity based on our analysis of various factors. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements with third parties) and borrowings under our unsecured revolving credit facility. However, an inability to access liquidity through multiple capital sources concurrently could have a Material Adverse Effect on us. See “Risk Factors—Risks Arising from Our Capital Structure—Limitations on our ability to access capital could have an adverse effect on our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy” included in Part I, Item 1A of this Annual Report on Form 10-K.

Unsecured Credit Facility and Unsecured Term Loans

Our unsecured credit facility is comprised of a $2.0 billion revolving credit facility priced at LIBOR plus 1.0% as of December 31, 2016 , and a $200.0 million term loan and a $371.2 million term loan, each priced at LIBOR plus 1.05% . The revolving credit facility matures in January 2018, but may be extended, at our option subject to the satisfaction of certain conditions, for an additional period of one year. The $200.0 million and $371.2 million term loans mature in January 2018 and January 2019, respectively. The unsecured credit facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.5 billion .

As of December 31, 2016 , we had $146.5 million of borrowings outstanding, $14.1 million of letters of credit outstanding and $1.8 billion of unused borrowing capacity available under our unsecured revolving credit facility.

As of December 31, 2016 , we also had a $900.0 million term loan due 2020 priced at LIBOR plus 97.5 basis points.

In May 2016, we repaid $100.0 million outstanding on our unsecured term loan due 2019 using cash on hand and recognized a loss on extinguishment of debt of $0.4 million , representing a write-off of the then unamortized deferred financing fees.

The agreement governing our unsecured credit facility requires us to comply with various financial and other restrictive covenants. See “ NOTE 10—SENIOR NOTES PAYABLE AND OTHER DEBT ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. We were in compliance with all of these covenants at December 31, 2016 .

Senior Notes

As of December 31, 2016 , we had $7.1 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), and guaranteed by Ventas, Inc. outstanding as follows:

• $300.0 million principal amount of 1.250% senior notes due 2017;


•	$700.0 million principal amount of 2.000% senior notes due 2018 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$600.0 million principal amount of 4.000% senior notes due 2019 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$500.0 million principal amount of 2.700% senior notes due 2020 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$700.0 million principal amount of 4.750% senior notes due 2021 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$600.0 million principal amount of 4.250% senior notes due 2022 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$500.0 million principal amount of 3.250% senior notes due 2022 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);

• $400.0 million principal amount of 3.125% senior notes due 2023 ;


•	$400.0 million principal amount of 3.750% senior notes due 2024;


•	$600.0 million principal amount of 3.50% senior notes due 2025;


•	$500.0 million principal amount of 4.125% senior notes due 2026;


•	$450.0 million principal amount of 3.25% senior notes due 2026;


•	$258.8 million principal amount of 5.45% senior notes due 2043 (co-issued with Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation);


•	$300.0 million principal amount of 5.70% senior notes due 2043; and


•	$300.0 million principal amount of 4.375% senior notes due 2045.

As of December 31, 2016 , we had $75.4 million aggregate principal amount of senior notes of our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, outstanding as follows:


•	$52.4 million principal amount of 6.90% senior notes due 2037 (subject to earlier repayment at the option of the holder); and


•	$23.0 million principal amount of 6.59% senior notes due 2038 (subject to earlier repayment at the option of the holder).

In addition, as of December 31, 2016 , we had $670.1 million aggregate principal amount of senior notes of our wholly owned subsidiary, Ventas Canada Finance Limited, and guaranteed by Ventas, Inc. outstanding as follows:


•	$297.8 million (CAD 400.0 million) principal amount of 3.00% senior notes, series A due 2019;


•	$186.2 million (CAD 250.0 million) principal amount of 3.300% senior notes due 2022; and


•	$186.2 million (CAD 250.0 million) principal amount of 4.125% senior notes, series B due 2024.

2016 Activity

In May 2016, we issued and sold $400.0 million aggregate principal amount of 3.125% senior notes due 2023 at a public offering price equal to 99.343% of par, for total proceeds of $397.4 million before the underwriting discount and expenses.

In June 2016, we redeemed $455.5 million aggregate principal amount then outstanding of our 1.55% senior notes due September 2016 at a public offering price of 100.335% of par, plus accrued and unpaid interest to the redemption date, and recognized a loss on extinguishment of debt of $2.1 million . The redemption was funded using proceeds from our May 2016 senior note issuance, cash on hand and borrowings under our revolving credit facility. In July 2016, we repaid the remaining balance then outstanding of our 1.55% senior notes due September 2016 of $94.5 million and recognized a loss on extinguishment of debt of $0.3 million .

In September 2016, we issued and sold $450.0 million aggregate principal amount of 3.25% senior notes due 2026 at a public offering price equal to 99.811% of par, for total proceeds of $449.1 million before the underwriting discount and expenses.

2015 Activity

In January 2015, Ventas Realty issued and sold $600.0 million aggregate principal amount of 3.500% senior notes due 2025 at a public offering price equal to 99.663% of par, for total proceeds of $598.0 million before the underwriting discount and expenses, and $300.0 million aggregate principal amount of 4.375% senior notes due 2045 at a public offering price equal to 99.500% of par, for total proceeds of $298.5 million before the underwriting discount and expenses.

Also in January 2015, Ventas Canada Finance Limited issued and sold CAD 250.0 million aggregate principal amount of 3.30% senior notes, series C due 2022 at an offering price equal to 99.992% of par, for total proceeds of CAD 250.0 million before the agent fees and expenses. The notes were offered on a private placement basis in Canada.

In May 2015, we repaid in full, at par, $234.4 million aggregate principal amount then outstanding of our 6% senior notes due 2015 upon maturity.

In July 2015, we issued and sold $500.0 million aggregate principal amount of 4.125% senior notes due 2026 at a public offering price equal to 99.218% of par, for total proceeds of $496.1 million before the underwriting discount and expenses.

In September 2015, we redeemed all $400.0 million principal amount then outstanding of our 3.125% senior notes due November 2015 at a redemption price equal to 100.7% of par, plus accrued and unpaid interest to the redemption date, and recognized a loss on extinguishment of debt of $2.9 million .

We may, from time to time, seek to retire or purchase our outstanding senior notes for cash or in exchange for equity securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, prospects for future access to capital and other factors. The amounts involved may be material.

The indentures governing our outstanding senior notes require us to comply with various financial and other restrictive covenants. See “ NOTE 10—SENIOR NOTES PAYABLE AND OTHER DEBT ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. We were in compliance with all of these covenants at December 31, 2016 .

Mortgage Loan Obligations

As of December 31, 2016 and 2015 , our consolidated aggregate principal amount of mortgage debt outstanding was $1.7 billion and $2.0 billion , respectively, of which our share was $1.6 billion and $1.9 billion , respectively.

During 2016, we repaid in full mortgage loans in the aggregate principal amount $337.8 million and a weighted average maturity of 1.66 years and recognized a loss on extinguishment of debt of less than $0.1 million in connection with these repayments.

During 2015, we repaid in full mortgage loans in the aggregate principal amount of $461.9 million and a weighted average maturity of 2.1 years and recognized a loss on extinguishment of debt of $9.9 million in connection with these repayments.

During 2014, we assumed or incurred mortgage debt of $246.8 million and repaid in full mortgage loans outstanding in the aggregate principal amount of $398.0 million . We recognized a net loss on extinguishment of debt of $2.3 million in connection with these repayments.

Under certain circumstances, contractual and legal restrictions, including those contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness, may restrict our ability to obtain cash from our subsidiaries for the purpose of meeting our debt service obligations, including our payment guarantees with respect to Ventas Realty’s and Ventas Canada Finance Limited’s senior notes.

See “ NOTE 4—ACQUISITIONS OF REAL ESTATE PROPERTY ” and “ NOTE 10—SENIOR NOTES PAYABLE AND OTHER DEBT ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Derivatives and Hedging

In January and February 2017, we entered into a total of $200 million of notional forward starting swaps with an effective date of April 3, 2017 , that reduce our exposure to fluctuations in interest rates related to changes in rates between now and the forecasted issuance of long-term debt. The rate on the notional amounts is locked at a weighted average rate of 2.33% .

Dividends

In order to continue to qualify as a REIT, we must make annual distributions to our stockholders of at least 90% of our REIT taxable income (excluding net capital gain). In 2016 , our Board of Directors declared and we paid cash dividends on our common stock aggregating $2.965 per share, which exceeds 100% of our 2016 estimated taxable income after the use of any net operating loss carryforwards. We intend to pay dividends greater than 100% of our taxable income, after the use of any net operating loss carryforwards, for 2017 .

We expect that our cash flows will exceed our REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income and that we will be able to satisfy the 90% distribution requirement. However, from time to time, we may not have sufficient cash on hand or other liquid assets to meet this requirement or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. If we do not have sufficient cash on hand or other liquid assets to enable us to satisfy the 90% distribution requirement, or if we desire to retain cash, we may borrow funds, issue additional equity securities, pay taxable stock dividends, if possible, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements or any combination of the foregoing. See “Certain U.S. Federal Income Tax Considerations—Requirements for Qualification as a REIT—Annual Distribution Requirements” included in Part I, Item 1 of this Annual Report on Form 10-K.

Capital Expenditures

The terms of our triple-net leases generally obligate our tenants to pay all capital expenditures necessary to maintain and improve our triple-net leased properties. However, from time to time, we may fund the capital expenditures for our triple-net leased properties through loans to the tenants or advances, which may increase the amount of rent payable with respect to the properties in certain cases. We expect to fund any capital expenditures for which we may become responsible upon expiration of our triple-net leases or in the event that our tenants are unable or unwilling to meet their obligations under those leases with cash flows from operations or through additional borrowings.

We also expect to fund capital expenditures related to our senior living operations and office operations reportable business segments with the cash flows from the properties or through additional borrowings. To the extent that unanticipated capital expenditure needs arise or significant borrowings are required, our liquidity may be affected adversely. Our ability to borrow additional funds may be restricted in certain circumstances by the terms of the instruments governing our outstanding indebtedness.

estate entity. In addition, from time to time, we engage in redevelopment projects with respect to our existing seniors housing communities to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.

Equity Offerings and Related Events

In March 2015, we replaced our previous shelf registration statement that was scheduled to expire in accordance with the SEC’s rules with a new universal shelf registration statement, rendering our previous ATM program inaccessible. In connection with our new universal shelf registration statement, we established a new ATM program pursuant to which we may sell, from time to time, up to an aggregate of $1.0 billion of our common stock.

For the year ended December 31, 2016 , we issued and sold 18.9 million shares of common stock under our ATM equity offering program and public offerings. Aggregate net proceeds for these activities were approximately $1.3 billion , after sales agent commissions. As of December 31, 2016 , approximately $230.6 million of our common stock remained available for sale under our ATM equity offering program.

Other

We received proceeds of $20.4 million and $6.4 million for the years ended December 31, 2016 and 2015 , respectively, from the exercises of outstanding stock options. Future proceeds from the exercises of stock options will be affected primarily by the future trading price of our common stock and the number of options outstanding. The number of options outstanding increased to 3.8 million as of December 31, 2016 , from 3.1 million as of December 31, 2015 . The weighted average exercise price was $56.05 as of December 31, 2016 .

We issued approximately 19,000 shares of common stock under our Distribution Reinvestment and Stock Purchase Plan (“DRIP”) for net proceeds of $1.2 million for the year ended December 31, 2014. The DRIP was suspended effective July 3, 2014. We may determine whether or not to reinstate the DRIP at any time, in our sole discretion.

Cash Flows

The following table sets forth our sources and uses of cash flows for the years ended December 31, 2016 and 2015 :



	For the Year Ended December 31,						Increase (Decrease) to Cash
	2016			2015			$			%
	(Dollars in thousands)
Cash and cash equivalents at beginning of period	$	53,023		$	55,348		$	(2,325	)	(4.2	)%
Net cash provided by operating activities	1,367,457			1,391,767			(24,310		)	(1.7	)
Net cash used in investing activities	(1,234,643		)	(2,423,692		)	1,189,049			49.1
Net cash provided by financing activities	101,722			1,030,122			(928,400		)	(90.1	)
Effect of foreign currency translation on cash and cash equivalents	(852		)	(522		)	(330		)	(63.2	)
Cash and cash equivalents at end of period	$	286,707		$	53,023		233,684			nm

nm—not meaningful

Cash Flows from Operating Activities

Cash flows from operating activities decreased $24.3 million during the year ended December 31, 2016 over the same period in 2015. The decrease included activity in 2015 from the properties that were disposed of as part of the CCP Spin-Off and payments received from tenants during the first quarter of 2015, partially offset by cash inflows related to the August 2015 acquisition of Ardent Health Services, Inc. and cash inflows related to the September 2016 Life Sciences Acquisition.

Cash Flows from Investing Activities

Cash used in investing activities decreased $1.2 billion during 2016 over 2015 primarily due to decreased investments in real estate ( $1.2 billion ) and increased proceeds from loans receivable ( $210.9 million ), partially offset by an increase in development project and capital expenditures ( $33.9 million ) and decreases in proceeds from real estate disposals ( $191.8 million ) and proceeds from the sale or maturity of marketable securities ( $76.8 million ).

Cash Flows from Financing Activities

Cash provided by financing activities decreased $928.4 million during 2016 over 2015 . This difference is primarily due to decreased proceeds from the issuance of debt, net of repayments (including the impact of proceeds and repayments related to the 2015 CCP Spin-Off), partially offset by an increase in common stock issuances during 2016.

Contractual Obligations

The following table summarizes the effect that minimum debt (which includes principal and interest payments) and other material noncancelable commitments are expected to have on our cash flow in future periods as of December 31, 2016 :



	Total		Less than 1 year ⁽³⁾		1 - 3 years ⁽⁴⁾		3 - 5 years ⁽⁵⁾		More than 5 years ⁽⁶⁾
	(In thousands)
Long-term debt obligations ^{(1) (2)}	$	14,438,918	$	1,033,670	$	3,656,987	$	2,721,903	$	7,026,358
Operating obligations, including ground lease obligations	743,995		28,146		46,407		40,871		628,571
Total	$	15,182,913	$	1,061,816	$	3,703,394	$	2,762,774	$	7,654,929


⁽¹⁾	Amounts represent contractual amounts due, including interest.


⁽²⁾	Interest on variable rate debt was based on forward rates obtained as of December 31, 2016 .


⁽³⁾	Includes $300.0 million outstanding principal amount of our 1.250% senior notes due 2017.


⁽⁴⁾	Includes $146.5 million of borrowings outstanding on our unsecured revolving credit facility, $700.0 million outstanding principal amount of our 2.00% senior notes due 2018 and $200.0 million of borrowings under our unsecured term loan due 2018.

⁽⁵⁾

Includes $371.2 million of borrowings under our unsecured term loan due 2019, $600.0 million outstanding principal amount of our 4.00% senior notes due 2019, $297.8 million outstanding principal amount of our 3.00% senior notes, series A due 2019, $500.0 million outstanding principal amount of our 2.700% senior notes due 2020 and $900.0 million of borrowings under our unsecured term loan due 2020.

⁽⁶⁾

Includes $5.5 billion aggregate principal amount outstanding of our senior notes maturing between 2021 and 2045. $52.4 million aggregate principal amount outstanding of our 6.90% senior notes due 2037 are subject to repurchase, at the option of the holders, on October 1 in each of 2017 and 2027, and $23.0 million aggregate principal amount outstanding of our 6.59% senior notes due 2038 are subject to repurchase, at the option of the holders, on July 7 in each of 2018, 2023 and 2028.

As of December 31, 2016 , we had $21.0 million of unrecognized tax benefits that are excluded from the table above, as we are unable to make a reasonable reliable estimate of the period of cash settlement, if any, with the respective tax authority.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The information set forth in Item 7 of this Annual Report on Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asset/Liability Management” is incorporated by reference into this Item 7A.

ITEM 8. Financial Statements and Supplementary Data

Ventas, Inc.

Index to Consolidated Financial Statements and Financial Statement Schedules



Management Report on Internal Control over Financial Reporting	81
Report of Independent Registered Public Accounting Firm	82
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	83
Consolidated Balance Sheets as of December 31, 2016 and 2015	84
Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014	85
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	86
Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014	87
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	88
Notes to Consolidated Financial Statements	90
Consolidated Financial Statement Schedule s
Schedule II — Valuation and Qualifying Accounts	144
Schedule III — Real Estate and Accumulated Depreciation	145
Schedule IV — Mortgage Loans on Real Estate	185

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act of 1934. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that our internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2016.

The effectiveness of our internal control over financial reporting as of December 31, 2016 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors

Ventas, Inc.:

We have audited Ventas, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on the Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Ventas, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Ventas, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and our report dated February 13, 2017 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Chicago, Illinois

February 13, 2017

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Stockholders and Board of Directors

Ventas, Inc.:

We have audited the accompanying consolidated balance sheets of Ventas, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three‑year period ended December 31, 2016. In connection with our audits of the consolidated financial statements, we also have audited financial statement schedules II, III and IV. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ventas Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three‑year period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Ventas, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 13, 2017 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Chicago, Illinois

February 13, 2017

VENTAS, INC.

CONSOLIDATED BALANCE SHEETS



	As of December 31,
	2016			2015
	(In thousands, except per share amounts)
Assets
Real estate investments:
Land and improvements	$	2,089,591		$	2,056,428
Buildings and improvements	21,516,396			20,309,599
Construction in progress	210,599			92,005
Acquired lease intangibles	1,510,629			1,344,422
	25,327,215			23,802,454
Accumulated depreciation and amortization	(4,932,461		)	(4,177,234		)
Net real estate property	20,394,754			19,625,220
Secured loans receivable and investments, net	702,021			857,112
Investments in unconsolidated real estate entities	95,921			95,707
Net real estate investments	21,192,696			20,578,039
Cash and cash equivalents	286,707			53,023
Escrow deposits and restricted cash	80,647			77,896
Goodwill	1,033,225			1,047,497
Assets held for sale	54,961			93,060
Other assets	518,364			412,403
Total assets	$	23,166,600		$	22,261,918
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	11,127,326		$	11,206,996
Accrued interest	83,762			80,864
Accounts payable and other liabilities	907,928			779,380
Liabilities related to assets held for sale	1,462			34,340
Deferred income taxes	316,641			338,382
Total liabilities	12,437,119			12,439,962
Redeemable OP unitholder and noncontrolling interests	200,728			196,529
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued	—			—
Common stock, $0.25 par value; 600,000 shares authorized, 354,125 and 334,386 shares issued at December 31, 2016 and 2015, respectively	88,514			83,579
Capital in excess of par value	12,917,002			11,602,838
Accumulated other comprehensive loss	(57,534		)	(7,565		)
Retained earnings (deficit)	(2,487,695		)	(2,111,958		)
Treasury stock, 1 and 44 shares at December 31, 2016 and 2015, respectively	(47		)	(2,567		)
Total Ventas stockholders’ equity	10,460,240			9,564,327
Noncontrolling interest	68,513			61,100
Total equity	10,528,753			9,625,427
Total liabilities and equity	$	23,166,600		$	22,261,918

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF INCOME



	For the Years Ended December 31,
	2016			2015			2014
	(In thousands, except per share amounts)
Revenues
Rental income:
Triple-net leased	$	845,834		$	779,801		$	674,547
Office	630,342			566,245			463,910
	1,476,176			1,346,046			1,138,457
Resident fees and services	1,847,306			1,811,255			1,552,951
Office building and other services revenue	21,070			41,492			29,364
Income from loans and investments	98,094			86,553			51,778
Interest and other income	876			1,052			4,263
Total revenues	3,443,522			3,286,398			2,776,813
Expenses
Interest	419,740			367,114			292,065
Depreciation and amortization	898,924			894,057			725,216
Property-level operating expenses:
Senior living	1,242,978			1,209,415			1,036,556
Office	191,784			174,225			158,832
	1,434,762			1,383,640			1,195,388
Office building services costs	7,311			26,565			17,092
General, administrative and professional fees	126,875			128,035			121,738
Loss on extinguishment of debt, net	2,779			14,411			5,564
Merger-related expenses and deal costs	24,635			102,944			43,304
Other	9,988			17,957			25,743
Total expenses	2,925,014			2,934,723			2,426,110
Income before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest	518,508			351,675			350,703
Income (loss) from unconsolidated entities	4,358			(1,420		)	(139		)
Income tax benefit	31,343			39,284			8,732
Income from continuing operations	554,209			389,539			359,296
Discontinued operations	(922		)	11,103			99,735
Gain on real estate dispositions	98,203			18,580			17,970
Net income	651,490			419,222			477,001
Net income attributable to noncontrolling interest	2,259			1,379			1,234
Net income attributable to common stockholders	$	649,231		$	417,843		$	475,767
Earnings per common share
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	1.88		$	1.23		$	1.28
Discontinued operations	0.00			0.03			0.34
Net income attributable to common stockholders	$	1.88		$	1.26		$	1.62
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	1.86		$	1.22		$	1.26
Discontinued operations	0.00			0.03			0.34
Net income attributable to common stockholders	$	1.86		$	1.25		$	1.60
Weighted average shares used in computing earnings per common share:
Basic	344,703			330,311			294,175
Diluted	348,390			334,007			296,677

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	For the Years Ended December 31,
	2016			2015			2014
	(In thousands)

Net income	$	651,490		$	419,222		$	477,001
Other comprehensive loss:
Foreign currency translation	(52,266		)	(14,792		)	(17,153		)
Change in unrealized gain on marketable debt securities	(310		)	(5,236		)	7,001
Other	2,607			(658		)	3,614
Total other comprehensive loss	(49,969		)	(20,686		)	(6,538		)
Comprehensive income	601,521			398,536			470,463
Comprehensive income attributable to noncontrolling interest	2,259			1,379			1,234
Comprehensive income attributable to common stockholders	$	599,262		$	397,157		$	469,229

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

For the Years Ended December 31, 2016 , 2015 and 2014



	Common Stock Par Value			Capital in Excess of Par Value			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Deficit)			Treasury Stock			Total Ventas Stockholders’ Equity			Non- controlling Interest			Total Equity
	(In thousands, except per share amounts)
Balance at January 1, 2014	$	74,488		$	10,078,592		$	19,659		$	(1,126,541	)	$	(221,917	)	$	8,824,281		$	79,530		$	8,903,811
Net income	—			—			—			475,767			—			475,767			1,234			477,001
Other comprehensive loss	—			—			(6,538		)	—			—			(6,538		)	—			(6,538		)
Retirement of stock	(924		)	(220,152		)	—			—			221,076			—			—			—
Acquisition-related activity	37			10,141			—			—			—			10,178			—			10,178
Net change in noncontrolling interest	—			1,163			—			—			—			1,163			(8,477		)	(7,314		)
Dividends to common stockholders—$2.965 per share	—			—			—			(875,614		)	—			(875,614		)	—			(875,614		)
Issuance of common stock	845			241,262			—			—			—			242,107			—			242,107
Issuance of common stock for stock plans	173			29,266			—			—			3,858			33,297			—			33,297
Change in redeemable noncontrolling interest	—			(1,082		)	—			—			—			(1,082		)	1,926			844
Adjust redeemable OP unitholder interests to current fair value	—			(32,993		)	—			—			—			(32,993		)	—			(32,993		)
Purchase of OP units	1			(83		)	—			—			—			(82		)	—			(82		)
Grant of restricted stock, net of forfeitures	36			13,192			—			—			(3,528		)	9,700			—			9,700
Balance at December 31, 2014	74,656			10,119,306			13,121			(1,526,388		)	(511		)	8,680,184			74,213			8,754,397
Net income	—			—			—			417,843			—			417,843			1,379			419,222
Other comprehensive loss	—			—			(20,686		)	—			—			(20,686		)	—			(20,686		)
Acquisition-related activity	7,103			2,209,202			—			—			—			2,216,305			853			2,217,158
Impact of CCP Spin-Off	—			(1,247,356		)	—			—			—			(1,247,356		)	(4,717		)	(1,252,073		)
Net change in noncontrolling interest	—			—			—			—			—			—			(12,530		)	(12,530		)
Dividends to common stockholders—$3.04 per share	—			—			—			(1,003,413		)	—			(1,003,413		)	—			(1,003,413		)
Issuance of common stock	1,797			489,227			—			—			—			491,024			—			491,024
Issuance of common stock for stock plans	23			6,068			—			—			5,945			12,036			—			12,036
Change in redeemable noncontrolling interest	—			(374		)	—			—			—			(374		)	1,902			1,528
Adjust redeemable OP unitholder interests to current fair value	—			7,831			—			—			—			7,831			—			7,831
Purchase of OP units	—			1,719			—			—			—			1,719			—			1,719
Grant of restricted stock, net of forfeitures	—			17,215			—			—			(8,001		)	9,214			—			9,214
Balance at December 31, 2015	83,579			11,602,838			(7,565		)	(2,111,958		)	(2,567		)	9,564,327			61,100			9,625,427
Net income	—			—			—			649,231			—			649,231			2,259			651,490
Other comprehensive loss	—			—			(49,969		)	—			—			(49,969		)	—			(49,969		)
Impact of CCP Spin-Off	—			640			—			—			—			640			—			640
Net change in noncontrolling interest	—			(2,179		)	—			—			—			(2,179		)	19,008			16,829
Dividends to common stockholders—$2.965 per share	—			—			—			(1,024,968		)	—			(1,024,968		)	—			(1,024,968		)
Issuance of common stock	4,716			1,281,947			—			—			17			1,286,680			—			1,286,680
Issuance of common stock for stock plans	99			26,594			—			—			2,572			29,265			—			29,265
Change in redeemable noncontrolling interest	—			(1,714		)	—			—			—			(1,714		)	(13,854		)	(15,568		)
Adjust redeemable OP unitholder interests to current fair value	—			(21,085		)	—			—			—			(21,085		)	—			(21,085		)
Purchase of OP units	92			22,622			—			—			1,098			23,812			—			23,812
Grant of restricted stock, net of forfeitures	28			7,339			—			—			(1,167		)	6,200			—			6,200
Balance at December 31, 2016	$	88,514		$	12,917,002		$	(57,534	)	$	(2,487,695	)	$	(47	)	$	10,460,240		$	68,513		$	10,528,753

See accompanying notes.

V ENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2016			2015			2014
	(In thousands)
Cash flows from operating activities:
Net income	$	651,490		$	419,222		$	477,001
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amounts in discontinued operations)	898,924			973,663			828,467
Amortization of deferred revenue and lease intangibles, net	(20,336		)	(24,129		)	(18,871		)
Other non-cash amortization	10,357			5,448			(312		)
Stock-based compensation	20,958			19,537			20,994
Straight-lining of rental income, net	(27,988		)	(33,792		)	(38,687		)
Loss on extinguishment of debt, net	2,779			14,411			5,564
Gain on real estate dispositions (including amounts in discontinued operations)	(98,203		)	(18,811		)	(19,183		)
Gain on real estate loan investments	(2,271		)	—			(1,455		)
Gain on sale of marketable securities	—			(5,800		)	—
Income tax benefit	(34,227		)	(42,384		)	(9,431		)
(Income) loss from unconsolidated entities	(4,358		)	1,244			139
Distributions from unconsolidated entities	7,598			23,462			6,508
Other	(1,847		)	6,693			9,416
Changes in operating assets and liabilities:
Decrease in other assets	5,560			42,316			5,317
Increase in accrued interest	2,604			19,995			7,958
Decrease in accounts payable and other liabilities	(43,583		)	(9,308		)	(18,580		)
Net cash provided by operating activities	1,367,457			1,391,767			1,254,845
Cash flows from investing activities:
Net investment in real estate property	(1,429,112		)	(2,650,788		)	(1,468,286		)
Investment in loans receivable and other	(158,635		)	(171,144		)	(498,992		)
Proceeds from real estate disposals	300,561			492,408			118,246
Proceeds from loans receivable	320,082			109,176			73,557
Purchase of marketable securities	—			—			(96,689		)
Proceeds from sale or maturity of marketable securities	—			76,800			21,689
Funds held in escrow for future development expenditures	—			4,003			4,590
Development project expenditures	(143,647		)	(119,674		)	(106,988		)
Capital expenditures	(117,456		)	(107,487		)	(87,454		)
Investment in unconsolidated operating entity	—			(26,282		)	—
Contributions to unconsolidated entities	—			(30,704		)	(5,598		)
Other	(6,436		)	—			(9,115		)
Net cash used in investing activities	(1,234,643		)	(2,423,692		)	(2,055,040		)
Cash flows from financing activities:
Net change in borrowings under credit facilities	(35,637		)	(723,457		)	540,203
Net cash impact of CCP Spin-Off	—			(128,749		)	—
Proceeds from debt	893,218			2,512,747			2,007,707
Proceeds from debt related to CCP Spin-Off	—			1,400,000			—
Repayment of debt	(1,022,113		)	(1,435,596		)	(1,151,395		)
Purchase of noncontrolling interest	(2,846		)	(3,819		)	—
Payment of deferred financing costs	(6,555		)	(24,665		)	(14,220		)
Issuance of common stock, net	1,286,680			491,023			242,107
Cash distribution to common stockholders	(1,024,968		)	(1,003,413		)	(875,614		)
Cash distribution to redeemable OP unitholders	(8,640		)	(15,095		)	(5,762		)
Purchases of redeemable OP units	—			(33,188		)	(503		)
Contributions from noncontrolling interest	7,326			—			491
Distributions to noncontrolling interest	(6,879		)	(12,649		)	(9,559		)
Other	22,136			6,983			24,602
Net cash provided by financing activities	101,722			1,030,122			758,057
Net increase (decrease) in cash and cash equivalents	234,536			(1,803		)	(42,138		)
Effect of foreign currency translation on cash and cash equivalents	(852		)	(522		)	2,670
Cash and cash equivalents at beginning of period	53,023			55,348			94,816
Cash and cash equivalents at end of period	$	286,707		$	53,023		$	55,348

V ENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)



	For the Years Ended December 31,
	2016			2015			2014
	(In thousands)
Supplemental disclosure of cash flow information:
Interest paid including swap payments and receipts	$	395,138		$	391,699		$	361,144
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from acquisitions:
Real estate investments	$	69,092		$	2,565,960		$	370,741
Utilization of funds held for an Internal Revenue Code Section 1031 exchange	(6,954		)	(8,911		)	—
Other assets acquired	90,037			20,090			15,280
Debt assumed	47,641			177,857			241,076
Other liabilities	72,636			54,459			24,039
Deferred income tax liability	9,381			52,153			110,728
Noncontrolling interest	22,517			88,085			—
Equity issued	—			2,204,585			10,178
Non-cash impact of CCP Spin-Off	—			1,256,404			—
Equity issued for purchase of OP and Class C units	24,318			—			—

See accompanying notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—DESCRIPTION OF BUSINESS

Ventas, Inc. (together with its subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us” or “our”), an S&P 500 company, is a real estate investment trust (“REIT”) with a highly diversified portfolio of seniors housing and healthcare properties located throughout the United States, Canada and the United Kingdom. As of December 31, 2016 , we owned approximately 1,300 properties (including properties owned through investments in unconsolidated entities and properties classified as held for sale), consisting of seniors housing communities, medical office buildings (“MOBs”), life science and innovation centers, skilled nursing facilities (“SNFs”), specialty hospitals and general acute care hospitals, and we had six properties under development, including one property that is owned by an unconsolidated real estate entity. Our company was originally founded in 1983 and is headquartered in Chicago, Illinois.

We primarily invest in seniors housing and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party managers. As of December 31, 2016 , we leased a total of 549 properties (excluding MOBs and 33 properties owned through investments in unconsolidated entities) to various healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and we engaged independent operators, such as Atria Senior Living, Inc. (“Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 299 seniors housing communities (including one property owned through an investment in unconsolidated entities) for us pursuant to long-term management agreements.

Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Kindred Healthcare, Inc. (together with its subsidiaries, “Kindred”) and Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) leased from us 140 properties (excluding six properties owned through investments in unconsolidated entities and excluding one property managed by Brookdale Senior Living pursuant to a long-term management agreement), 68 properties (excluding one MOB) and ten properties, respectively, as of December 31, 2016 .

As further discussed in “ NOTE 5—DISPOSITIONS ”, in August 2015 we completed the spin-off of most of our post-acute/skilled nursing facility portfolio into an independent, publicly traded REIT named Care Capital Properties, Inc. (“CCP”) (the “CCP Spin-Off”). The historical results of operations of the CCP properties are presented as discontinued operations in the accompanying Consolidated Financial Statements.

NOTE 2—ACCOUNTING POLICIES

Principles of Consolidation

The accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

U.S. generally accepted accounting principles (“GAAP”) requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

• VIEs in the legal form of a limited partnership (“LP”) or limited liability company (“LLC”);

• The VIEs were designed to own and manage their underlying real estate investments;

• Ventas (or a subsidiary thereof) is the general partner or managing member of the VIE;

• Ventas (or a subsidiary thereof) also owns a majority of the voting interests in the VIE;

• A minority of voting interests in the VIE are owned by external third parties, unrelated to us;

• The minority owners do not have substantive kick-out or participating rights in the VIEs; and

• Ventas (or a subsidiary thereof) is the primary beneficiary of the VIE.

As part of the Life Sciences Acquisition, we identified certain special purpose entities that were established to allow investments in life science projects by tax credit investors (“TCIs”). We have determined that these special purpose entities are VIEs and that Ventas is the primary beneficiary of the VIEs, and therefore we consolidate these special purpose entities. Our primary beneficiary determination is based upon several factors, including but not limited to the rights we have in directing the activities which most significantly impact the VIEs’ economic performance as well as certain guarantees which protect the TCIs from losses should a tax credit recapture event occur.

In general, the assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities. Unless otherwise required by the LP or LLC agreement, any mortgage loans of the consolidated VIEs are non-recourse to us. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets.



	December 31, 2016				December 31, 2015
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In thousands)

NHP/PMB L.P.	$	639,763	$	199,674	$	645,109	$	203,235
Ventas Realty Capital Healthcare Trust Operating Partnership, L.P.	2,143,139		162,426		2,367,296		233,600
Other identified VIEs	1,882,336		354,034		1,582,430		431,582
Wexford tax credit VIEs ⁽¹⁾	981,752		234,109		—		—


⁽¹⁾	Balances relate to the Life Sciences Acquisition.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investments in Unconsolidated Entities

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. Under this method of accounting, our share of the investee’s earnings or losses is included in our Consolidated Statements of Income.

We base the initial carrying value of investments in unconsolidated entities on the fair value of the assets at the time we acquired the joint venture interest. We estimate fair values for our equity method investments based on discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums or discounts. The capitalization rates, discount rates and credit spreads we use in these models are based upon assumptions that we believe to be within a reasonable range of current market rates for the respective investments.

We generally amortize any difference between our cost basis and the basis reflected at the joint venture level, if any, over the lives of the related assets and liabilities and include that amortization in our share of income or loss from unconsolidated entities. For earnings of equity method investments with pro rata distribution allocations, net income or loss is allocated between the partners in the joint venture based on their respective stated ownership percentages. In other instances, net income or loss is allocated between the partners in the joint venture based on the hypothetical liquidation at book value method (the “HLBV method”). Under the HLBV method, net income or loss is allocated between the partners based on the difference between each partner’s claim on the net assets of the joint venture at the end and beginning of the period, after taking into account contributions and distributions. Each partner’s share of the net assets of the joint venture is calculated as the amount that the partner would receive if the joint venture were to liquidate all of its assets at net book value and distribute the resulting cash to creditors and partners in accordance with their respective priorities. Under this method, in any given period, we could record more or less income than the joint venture has generated, than actual cash distributions received or than the amount we may receive in the event of an actual liquidation.

Redeemable OP Unitholder and Noncontrolling Interests

We own a majority interest in NHP/PMB L.P. (“NHP/PMB”), a limited partnership formed in 2008 to acquire properties from entities affiliated with Pacific Medical Buildings LLC. We consolidate NHP/PMB, as our wholly owned subsidiary is the general partner, who is the primary beneficiary of this VIE. As of December 31, 2016 , third party investors owned 2,746,737 Class A limited partnership units in NHP/PMB (“OP Units”), which represented 27.7% of the total units then outstanding, and we owned 7,156,146 Class B limited partnership units in NHP/PMB, representing the remaining 72.3% . At any time following the first anniversary of the date of their issuance, the OP Units may be redeemed at the election of the holder for cash or, at our option, 0.9051 shares of our common stock per unit, and subject to further adjustment in certain circumstances. We are party by assumption to a registration rights agreement with the holders of the OP Units that requires us, subject to the terms and conditions and certain exceptions set forth therein, to file and maintain a registration statement relating to the issuance of shares of our common stock upon redemption of OP Units.

As of December 31, 2016 , we owned a majority interest in Ventas Realty Capital Healthcare Trust Operating Partnership, L.P. (“Ventas Realty OP”) and we consolidated this entity, as our wholly owned subsidiary was the general partner, who was the primary beneficiary of this VIE. The limited partnership units (“Class C Units”) may be redeemed at the election of the holder for one share of our common stock per unit or, at our option, an equivalent amount in cash, subject to adjustment in certain circumstances. We are party by assumption to a registration rights agreement with the holders of the Class C Units that requires us, subject to the terms and conditions and certain exceptions set forth therein, to file and maintain a registration statement relating to the issuance of shares of our common stock upon redemption of Class C Units. As of December 31, 2016 , third party investors owned 341,776 Class C Units, which represented 1.1% of the total units then outstanding, and we owned 29,327,561 Class C Units and 176,374 OP units in Ventas Realty OP, representing the remaining 98.9% .

During 2016, third party investors redeemed 65,581 OP Units and 331,208 Class C Units for 390,558 shares of Ventas common stock, valued at $24.3 million . During 2015, third party investors redeemed 9,309 OP Units and 445,541 Class C Units for approximately $33.2 million .

In January 2017, third party investors redeemed the remaining 341,776 Class C Units outstanding for 341,776 shares of Ventas common stock, valued at $20.9 million . After giving effect to such redemptions, Ventas Realty OP is our wholly owned subsidiary.

As redemption rights are outside of our control, the redeemable OP Units and Class C Units (together, the “OP Unitholder Interests”) are classified outside of permanent equity on our Consolidated Balance Sheets. We reflect the redeemable OP Unitholder Interests at the greater of cost or fair value. As of December 31, 2016 and 2015 , the fair value of the redeemable OP Unitholder Interests was $177.2 million and $188.5 million , respectively. We recognize changes in fair value through capital

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in excess of par value, net of cash distributions paid and purchases by us of any OP Unitholder Interests. Our diluted earnings per share (“EPS”) includes the effect of any potential shares outstanding from redemption of the OP Unitholder Interests.

Certain noncontrolling interests of other consolidated joint ventures were also classified as redeemable at December 31, 2016 and 2015 . Accordingly, we record the carrying amount of these noncontrolling interests at the greater of their initial carrying amount (increased or decreased for the noncontrolling interest’s share of net income or loss and distributions) or the redemption value. Our joint venture partners have certain redemption rights with respect to their noncontrolling interests in these joint ventures that are outside of our control, and the redeemable noncontrolling interests are classified outside of permanent equity on our Consolidated Balance Sheets. We recognize changes in carrying value of redeemable noncontrolling interests through capital in excess of par value.

Noncontrolling Interests

Excluding the redeemable noncontrolling interests described above, we present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interests and classify those interests as a component of consolidated equity, separate from total Ventas stockholders’ equity, on our Consolidated Balance Sheets. For consolidated joint ventures with pro rata distribution allocations, net income or loss is allocated between the joint venture partners based on their respective stated ownership percentages. In other instances, net income or loss is allocated between the joint venture partners based on the HLBV method. We account for purchases or sales of equity interests that do not result in a change of control as equity transactions, through capital in excess of par value. In addition, we include net income attributable to the noncontrolling interests in net income in our Consolidated Statements of Income.

Accounting for Historic and New Markets Tax Credits

As part of the Life Sciences Acquisition, we are party to certain contractual arrangements with TCIs that were established to enable the TCIs to receive benefits of historic tax credits (“HTCs”) and/or new market tax credits (“NMTCs”) for certain properties owned by Ventas. As of December 31, 2016 , we own 11 properties ( two of which were in development) that had syndicated HTCs or NMTCs, or both, to TCIs.

In general, capital contributions are made by TCIs into special purpose entities that invest in entities owning the subject property that generates the tax credits. The TCIs receive substantially all of the tax credits and hold only a noncontrolling interest in the economic risk and benefits of the special purpose entities.

HTCs are delivered to the TCIs upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCIs after the investment has been funded and spent on a qualified business. HTCs are subject to 20% recapture per year beginning one year after the completion of the historic rehabilitation of the subject property. NMTCs are subject to 100% recapture until the end of the seventh year following the qualifying investment. We have provided the TCIs with certain guarantees which protect the TCIs from losses should a tax credit recapture event occur. The contractual arrangements with the TCIs include a put/call provision whereby we may be obligated or entitled to repurchase the ownership interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. We anticipate that either the TCIs will exercise their put rights or we will exercise our call rights.

The portion of the TCI’s capital contribution that is attributed to the put is recorded at fair value at inception in accounts payable and other liabilities on our Consolidated Balance Sheets, and is accreted to the expected put price as interest expense in our Consolidated Statements of Income over the recapture period. The remaining balance of the TCI’s capital contribution is initially recorded in accounts payable and other liabilities on our Consolidated Balance Sheets and will be relieved upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. Direct and incremental costs incurred in structuring the transaction are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above.

Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Business Combinations

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

relationships, trade names/trademarks and goodwill. We do not amortize goodwill, which represents the excess of the purchase price paid over the fair value of the net assets of the acquired business.

We estimate the fair value of buildings acquired on an as-if-vacant basis, or replacement cost basis and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analyses of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.

The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above and/or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized amounts of lease-related intangibles associated with that lease in operations at that time.

We estimate the fair value of purchase option intangible assets and liabilities, if any, by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability upon sale.

In connection with a business combination, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable to us relative to market conditions on the acquisition date, we recognize an intangible asset or liability at fair value and amortize that asset or liability to interest or rental expense in our Consolidated Statements of Income over the applicable lease term. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

We determine the fair value of loans receivable acquired in connection with a business combination by discounting the estimated future cash flows using current interest rates at which similar loans with the same terms and length to maturity would be made to borrowers with similar credit ratings. We do not establish a valuation allowance at the acquisition date because the estimated future cash flows already reflect our judgment regarding their uncertainty. We recognize the difference between the acquisition date fair value and the total expected cash flows as interest income using an effective interest method over the life of the applicable loan. Subsequent to the acquisition date, we evaluate changes regarding the uncertainty of future cash flows and the need for a valuation allowance, as appropriate.

We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.

We calculate the fair value of long-term assumed debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.

Impairment of Long-Lived and Intangible Assets

Estimates of fair value used in our evaluation of goodwill (if necessary based on our qualitative assessment), investments in real estate, investments in unconsolidated entities and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

Assets Held for Sale and Discontinued Operations

We sell properties from time to time for various reasons, including favorable market conditions or the exercise of purchase options by tenants. We classify certain long-lived assets as held for sale once the criteria, as defined by GAAP, has been met. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell and are no longer depreciated. We report discontinued operations when the following criteria are met: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (2) an acquired business that is classified as held for sale on the acquisition date. Assets relating to the CCP Spin-Off were reported as discontinued operations once the transaction was completed. The results of operations for assets meeting the definition of discontinued operations are reflected in our Consolidated Statements of Income as discontinued operations for all periods presented. We allocate estimated interest expense to discontinued operations based on property values and our weighted average interest rate or the property’s actual mortgage interest.

Loans Receivable

We record loans receivable, other than those acquired in connection with a business combination, on our Consolidated Balance Sheets (either in secured loans receivable and investments, net or other assets, in the case of non-mortgage loans receivable) at the unpaid principal balance, net of any deferred origination fees, purchase discounts or premiums and valuation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

allowances. We amortize net deferred origination fees, which are comprised of loan fees collected from the borrower net of certain direct costs, and purchase discounts or premiums over the contractual life of the loan using the effective interest method and immediately recognize in income any unamortized balances if the loan is repaid before its contractual maturity.

We regularly evaluate the collectibility of loans receivable based on factors such as corporate and facility-level financial and operational reports, compliance with financial covenants set forth in the applicable loan agreement, the financial strength of the borrower and any guarantor, the payment history of the borrower and current economic conditions. If our evaluation of these factors indicates it is probable that we will be unable to collect all amounts due under the terms of the applicable loan agreement, we provide a reserve against the portion of the receivable that we estimate may not be collected.

Cash Equivalents

Cash equivalents consist of highly liquid investments with a maturity date of three months or less when purchased. These investments are stated at cost, which approximates fair value.

Escrow Deposits and Restricted Cash

Escrow deposits consist of amounts held by us or our lenders to provide for future real estate tax, insurance expenditures and tenant improvements related to our properties and operations. Restricted cash generally represents amounts paid to us for security deposits and other similar purposes.

Deferred Financing Costs

We amortize deferred financing costs, which are reported within senior notes payable and other debt on our Consolidated Balance Sheets, as a component of interest expense over the terms of the related borrowings using a method that approximates a level yield. Amortized costs of approximately $17.9 million , $18.7 million and $16.9 million were included in interest expense for the years ended December 31, 2016 , 2015 and 2014 , respectively.

Marketable Debt and Equity Securities

We record marketable debt and equity securities as available-for-sale and classify them as a component of other assets on our Consolidated Balance Sheets (other than our interests in government-sponsored pooled loan investments, which are classified as secured loans receivable and investments, net on our Consolidated Balance Sheets). We record these securities at fair value and include unrealized gains and losses recorded in stockholders’ equity as a component of accumulated other comprehensive income on our Consolidated Balance Sheets. We report interest income, including discount or premium amortization, on marketable debt securities and gains or losses on securities sold, which are based on the specific identification method, in income from loans and investments in our Consolidated Statements of Income.

Derivative Instruments

We recognize all derivative instruments in other assets or accounts payable and other liabilities on our Consolidated Balance Sheets at fair value as of the reporting date. We recognize changes in the fair value of derivative instruments in other expenses in our Consolidated Statements of Income or accumulated other comprehensive income on our Consolidated Balance Sheets, depending on the intended use of the derivative and our designation of the instrument.

We do not use our derivative financial instruments, including interest rate caps, interest rate swaps and foreign currency forward contracts, for trading or speculative purposes. Our foreign currency forward contracts and certain of our interest rate swaps (including the interest rate swap contracts of unconsolidated joint ventures) are designated as effectively hedging the variability of expected cash flows related to their underlying securities and, therefore, also are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in accumulated other comprehensive income on our Consolidated Balance Sheets. We recognize our proportionate share of the change in fair value of swap contracts of our unconsolidated joint ventures in accumulated other comprehensive income on our Consolidated Balance Sheets. Certain of our other interest rate swaps and rate caps were not designated as having a hedging relationship with the underlying securities and therefore do not meet the criteria for hedge accounting under GAAP. Accordingly, these interest rate swaps are recorded on our Consolidated Balance Sheets at fair value, and we recognize changes in the fair value of these instruments in current earnings (in other expenses) in our Consolidated Statements of Income.

Fair Values of Financial Instruments

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one inputs utilize unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. Level two inputs are inputs other than quoted prices included in level one that are directly or indirectly observable for the asset or liability. Level two inputs may include quoted prices for similar assets and liabilities in active markets and other inputs for the asset or liability that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates and yield curves. Level three inputs are unobservable inputs for the asset or liability, which typically are based on our own assumptions, because there is little, if any, related market activity. If the determination of the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. If the volume and level of market activity for an asset or liability has decreased significantly relative to the normal market activity for such asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that a transaction for an asset or liability is not orderly, little, if any, weight is placed on that transaction price as an indicator of fair value. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

We use the following methods and assumptions in estimating the fair value of our financial instruments.


•	Cash and cash equivalents - The carrying amount of unrestricted cash and cash equivalents reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.


•	Escrow deposits and restricted cash - The carrying amount of escrow deposits and restricted cash reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.


•	Loans receivable - We estimate the fair value of loans receivable using level two and level three inputs: we discount future cash flows using current interest rates at which similar loans with the same terms and length to maturity would be made to borrowers with similar credit ratings.

•

Marketable debt securities - We estimate the fair value of corporate bonds, if any, using level two inputs: we observe quoted prices for similar assets or liabilities in active markets that we have the ability to access. We estimate the fair value of certain government-sponsored pooled loan investments using level three inputs: we consider credit spreads, underlying asset performance and credit quality and default rates.

•

Derivative instruments - With the assistance of a third party, we estimate the fair value of derivative instruments, including interest rate caps, interest rate swaps, and foreign currency forward contracts using level two inputs: for interest rate caps, we observe forward yield curves and other relevant information; for interest rate swaps, we observe alternative financing rates derived from market-based financing rates, forward yield curves and discount rates; and for foreign currency forward contracts, we estimate the future values of the two currency tranches using forward exchange rates that are based on traded forward points and calculate a present value of the net amount using a discount factor based on observable traded interest rates.


•	Senior notes payable and other debt - We estimate the fair value of senior notes payable and other debt using level two inputs: we discount the future cash flows using current interest rates at which we could obtain similar borrowings. For mortgage debt, we may estimate fair value using level three inputs, similar to those used in determining fair value of loans receivable (above).


•	Redeemable OP unitholder interests - We estimate the fair value of our redeemable OP unitholder interests using level one inputs: we base fair value on the closing price of our common stock, as OP Units may be redeemed at the election of the holder for cash or, at our option, shares of our common stock, subject to adjustment in certain circumstances.

Revenue Recognition

Triple-Net Leased Properties and Office Operations

Certain of our triple-net leases and most of our MOB and life science innovation center (collectively, “office operations”) leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our Consolidated Balance Sheets. At December 31, 2016 and 2015 , this cumulative excess totaled $244.6 million (net of allowances

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of $109.8 million ) and $219.1 million (net of allowances of $101.4 million ), respectively (excluding properties classified as held for sale).

Senior Living Operations

Other

Allowances

Stock-Based Compensation

We recognize share-based payments to employees and directors, including grants of stock options, included in General, administrative and professional fees in our Consolidated Statements of Income generally on a straight-line basis over the requisite service period based on the grant date fair value of the award.

Gain on Sale of Assets

We recognize sales of assets only upon the closing of the transaction with the purchaser. We record payments received from purchasers prior to closing as deposits and classify them as other assets on our Consolidated Balance Sheets. We recognize gains (net of any taxes) on assets sold using the full accrual method upon closing if the collectibility of the sales price is reasonably assured, we are not obligated to perform any significant activities after the sale to earn the profit, we have received adequate initial investment from the purchaser, and other profit recognition criteria have been satisfied. We may defer recognition of gains in whole or in part until: (i) the profit is determinable, meaning that the collectibility of the sales price is reasonably assured or the amount that will not be collectible can be estimated; and (ii) the earnings process is virtually complete, meaning that we are not obliged to perform any significant activities after the sale to earn the profit.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Federal Income Tax

We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), for every year beginning with the year ended December 31, 1999. Accordingly, we generally are not subject to federal income tax on net income that we distribute to our stockholders, provided that we continue to qualify as a REIT. However, with respect to certain of our subsidiaries that have elected to be treated as taxable REIT subsidiaries (“TRS” or “TRS entities”), we record income tax expense or benefit, as those entities are subject to federal income tax similar to regular corporations. Certain foreign subsidiaries are subject to foreign income tax, although they did not elect to be treated as TRSs.

We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. We recognize interest and penalties, if applicable, related to uncertain tax positions as part of income tax benefit (expense).

Foreign Currency

Certain of our subsidiaries’ functional currencies are the local currencies of their respective foreign jurisdictions. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our Consolidated Balance Sheets, and we record foreign currency transaction gains and losses in our Consolidated Statements of Income.

Segment Reporting

As of December 31, 2016 , 2015 and 2014 , we operated through three reportable business segments: triple-net leased properties; senior living operations; and office operations. In our triple-net leased properties segment, we invest in seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease, and manage MOBs and life science and innovation centers throughout the United States. See “ NOTE 19—SEGMENT INFORMATION .”

Operating Leases

We account for payments made pursuant to operating leases in our Consolidated Statements of Income based on actual rent paid, plus or minus a straight-line rent adjustment for leases that provide for periodic and determinable increases in base rent.

Recently Issued or Adopted Accounting Standards

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On January 1, 2017 we adopted ASU 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”) which narrows the FASB’s definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. If this initial test is not met, a set cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output. This ASU is to be applied prospectively and we expect that many of our future real estate acquisitions will be accounted for as asset acquisitions in accordance with ASC 805, which provides for the capitalization of transaction costs and no recognition of goodwill.

In 2014, the FASB issued ASU 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In 2015, the FASB provided for a one-year deferral of the effective date for ASU 2014-09, which is now effective for us beginning January 1, 2018. We have begun our process for implementing this guidance, including performing a preliminary review of all revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. We are continuing to evaluate ASU 2014-09 (and related clarifying guidance issued by the FASB) and the allowable methods of adoption; however, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 3—CONCENTRATION OF CREDIT RISK

As of December 31, 2016 , Atria, Sunrise, Brookdale Senior Living, Kindred and Ardent managed or operated approximately 22.6% , 11.3% , 8.1% , 1.8% and 5.1% , respectively, of our real estate investments based on gross book value (excluding properties classified as held for sale and properties owned through investments in unconsolidated entities as of December 31, 2016 ). Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants.

Seniors housing communities constituted, based on gross book value, approximately 25.3% of real estate investments in the triple-net leased properties reportable business segment and 36.5% of real estate investments in the senior living operations reportable business segment (excluding properties classified as held for sale and properties owned through investments in unconsolidated entities as of December 31, 2016 ). MOBs, life science and innovation centers, SNFs, specialty hospitals and general acute care hospitals collectively comprised the remaining 38.2% . Our properties were located in 46 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of December 31, 2016 , with properties

100

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in one state ( California ) accounting for more than 10% of our total revenues and total net operating income (“NOI,” which is defined as total revenues, excluding interest and other income, less property-level operating expenses and office building services costs) (in each case excluding amounts in discontinued operations) for each of the years ended December 31, 2016 , 2015 and 2014 .

Triple-Net Leased Properties

For the years ended December 31, 2016 , 2015 and 2014 , approximately 4.8% , 5.3% and 6.1% , respectively, of our total revenues and 8.3% , 9.3% and 10.9% , respectively, of our total NOI (in each case excluding amounts in discontinued operations) were derived from our lease agreements with Brookdale Senior Living. For the same periods, approximately 5.4% , 5.7% and 5.9% , respectively, of our total revenues and 9.2% , 9.9% and 10.6% , respectively, of our total NOI (in each case excluding amounts in discontinued operations) were derived from our lease agreements with Kindred. As a result of our 2015 acquisition of Ardent Medical Services, Inc. (“AHS”) and simultaneous separation and sale of Ardent, for the year ended December 31, 2016 and 2015, approximately 3.1% and 1.3% of our total revenues and 5.3% and 2.3% of our total NOI (in each case excluding amounts in discontinued operations) were derived from our lease agreements with Ardent. Each of our leases with Brookdale Senior Living, Kindred and Ardent is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Kindred and Ardent leases has a corporate guaranty. Brookdale Senior Living and Kindred have multiple leases with us and those leases contain cross-default provisions tied to each other, as well as lease renewals by lease agreement or by pool of assets.

The properties we lease to Brookdale Senior Living, Kindred and Ardent accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the years ended December 31, 2016 , 2015 and 2014 . If either Brookdale Senior Living, Kindred or Ardent becomes unable or unwilling to satisfy its obligations to us or to renew its leases with us upon expiration of the terms thereof, our financial condition and results of operations could decline and our ability to service our indebtedness and to make distributions to our stockholders could be impaired. We cannot assure you that Brookdale Senior Living, Kindred and Ardent will have sufficient assets, income and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by Brookdale Senior Living, Kindred or Ardent to do so could have a material adverse effect on our business, financial condition, results of operations and liquidity, our ability to service our indebtedness and other obligations and our ability to make distributions to our stockholders, as required for us to continue to qualify as a REIT (a “Material Adverse Effect”). We also cannot assure you that Brookdale Senior Living, Kindred and Ardent will elect to renew their respective leases with us upon expiration of the leases or that we will be able to reposition any non-renewed properties on a timely basis or on the same or better economic terms, if at all.

On April 3, 2016, we entered into several agreements with Kindred to improve the quality and productivity of the long term acute care hospital (“LTAC”) portfolio leased by Ventas to Kindred. Certain of the agreements consist of lease amendments to the Kindred master leases, for which we received a $3.5 million fee. Under these lease amendments, annual rent on seven identified LTACs (the “7 LTACs”), which was approximately $8 million , was immediately re-allocated to other more productive post-acute assets subject to the Kindred master leases. Separately, in October 2016, we sold the 7 LTACs to an unrelated third party for $3.0 million , and recognized a gain of $2.9 million .

101

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table sets forth the future contracted minimum rentals, excluding contingent rent escalations, but including straight-line rent adjustments and reserves where applicable, for all of our triple-net and office building leases as of December 31, 2016 (excluding properties owned through investments in unconsolidated entities and properties classified as held for sale as of December 31, 2016 ):



	Brookdale Senior Living		Kindred		Ardent		Other		Total
	(In thousands)
2017	$	162,576	$	199,798	$	109,151	$	885,745	$	1,357,270
2018	162,089		173,249		109,151		835,173		1,279,662
2019	151,437		160,730		109,151		783,220		1,204,538
2020	34,410		160,771		109,151		735,444		1,039,776
2021	13,133		160,813		109,151		678,048		961,145
Thereafter	10,703		408,810		1,491,731		3,757,703		5,668,947
Total	$	534,348	$	1,264,171	$	2,037,486	$	7,675,333	$	11,511,338

Senior Living Operations

As of December 31, 2016 , Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 266 of our 298 seniors housing communities (excluding one property owned through an investment in unconsolidated entities), for which we pay annual management fees pursuant to long-term management agreements.

We rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees and otherwise operate our seniors housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. Although we have various rights as the property owner under our management agreements, including various rights to terminate and exercise remedies under the agreements as provided therein, Atria’s or Sunrise’s failure, inability or unwillingness to satisfy its respective obligations under those agreements, to efficiently and effectively manage our properties or to provide timely and accurate accounting information with respect thereto could have a Material Adverse Effect on us. In addition, significant changes in Atria’s or Sunrise’s senior management or equity ownership or any adverse developments in their businesses and affairs or financial condition could have a Material Adverse Effect on us.

Our 34% ownership interest in Atria entitles us to certain rights and minority protections, as well as the right to appoint two of six members on the Atria Board of Directors.

Brookdale Senior Living, Kindred, Atria, Sunrise and Ardent Information

Each of Brookdale Senior Living and Kindred is subject to the reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. The information related to Brookdale Senior Living and Kindred contained or referred to in this Annual Report on Form 10-K has been derived from SEC filings made by Brookdale Senior Living or Kindred, as the case may be, or other publicly available information, or was provided to us by Brookdale Senior Living or Kindred, and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy. We are providing this data for informational purposes only, and you are encouraged to obtain Brookdale Senior Living’s and Kindred’s publicly available filings, which can be found at the SEC’s website at www.sec.gov.

Atria, Sunrise and Ardent are not currently subject to the reporting requirements of the SEC. The information related to Atria, Sunrise and Ardent contained or referred to in this Annual Report on Form 10-K has been derived from publicly available information or was provided to us by Atria, Sunrise or Ardent, as the case may be, and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy.

102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4—ACQUISITIONS OF REAL ESTATE PROPERTY

The following summarizes our acquisition and development activities during 2016 , 2015 and 2014 . We invest in seniors housing and healthcare properties primarily to achieve an expected yield on our investment, to grow and diversify our portfolio and revenue base, and to reduce our dependence on any single tenant, operator or manager, geographic location, asset type, business model or revenue source.

2016 Acquisitions

Life Sciences Acquisition

In September 2016, we completed the acquisition of substantially all of the university affiliated life science and innovation real estate assets of Wexford from Blackstone for total consideration of $1.5 billion . The Life Sciences Acquisition added to our portfolio 23 operating properties, two development assets and nine future development sites. The properties acquired will continue to be managed by Wexford, which will remain a separate management company owned and operated by the existing Wexford management team. We have exclusive rights to fund and own future life science projects developed by Wexford.

Other 2016 Acquisitions

During the year ended December 31, 2016, we made other investments totaling approximately $42.3 million , including the acquisition of one triple-net leased property and two MOBs.

Completed Developments

During 2016, we completed the development of three triple-net leased properties ( two of which were expansions of existing seniors housing assets), representing $31.9 million of net real estate property on our Consolidated Balance Sheets as of December 31, 2016 .

Estimated Fair Value

We are accounting for our 2016 acquisitions under the acquisition method in accordance with ASC 805 and have completed our initial accounting, which is subject to further adjustment. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed in our 2016 real estate acquisitions, which we determined using level two and level three inputs:



		Triple-Net Leased Properties		Office Operations		Total
	(In thousands)
Land and improvements		$	1,579	$	55,456	$	57,035
Buildings and improvements		12,558		1,323,678		1,336,236
Acquired lease intangibles		163		200,022		200,185
Other assets		—		108,607		108,607
Total assets acquired		14,300		1,687,763		1,702,063
Notes payable and other debt		—		47,641		47,641
Intangible liabilities		—		103,769		103,769
Other liabilities		380		79,693		80,073
Total liabilities assumed		380		231,103		231,483
Noncontrolling interest assumed		—		22,517		22,517
Net assets acquired		13,920		1,434,143		1,448,063
Cash acquired		—		19,119		19,119
Total cash used		$	13,920	$	1,415,024	$	1,428,944

Aggregate Revenue and NOI

For the year ended December 31, 2016 , aggregate revenue and net operating income (“NOI”) derived from our completed 2016 acquisitions during our period of ownership were $55.7 million and $37.7 million , respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Transaction Costs

Transaction costs are expensed as incurred and included in merger-related expenses and deal costs in our Consolidated Statements of Income. During 2016, we expensed as incurred $19.1 million related to our completed 2016 transactions.

2015 Acquisitions

HCT Acquisition

In January 2015, we acquired HCT in a stock and cash transaction, which added 152 properties to our portfolio. At the effective time of the merger, each share of HCT common stock outstanding (other than shares held by us, HCT or our respective subsidiaries, which shares were canceled) was converted into the right to receive either 0.1688 shares of our common stock (with cash paid in lieu of fractional shares) or $11.33 per share in cash, at the election of each HCT shareholder. Shares of HCT common stock for which a valid election was not made were converted into the stock consideration. We funded the transaction through the issuance of approximately 28.4 million shares of our common stock and 1.1 million limited partnership units that are redeemable for shares of our common stock and the payment of approximately $11 million in cash (excluding cash in lieu of fractional shares). In addition, we assumed approximately $167 million of mortgage debt and repaid approximately $730 million of debt, net of HCT cash on hand. In August 2015, 20 of the properties that we acquired in the HCT acquisition were disposed of as part of the CCP Spin-Off.

Ardent Health Services Acquisition

On August 4, 2015, we completed our acquisition of Ardent Medical Services, Inc. and simultaneous separation and sale of the Ardent hospital operating company to a consortium composed of an entity controlled by Equity Group Investments, Ardent’s management team and us (collectively the “Ardent Transaction”). As of the acquisition date, we recorded the estimated fair value of our investment in owned hospital and other real estate of approximately $1.3 billion . At closing, we paid $26.3 million for our 9.9% interest in Ardent which represents our estimate of the acquisition date fair value of this interest. Upon closing, we entered into a long-term triple-net master lease with Ardent to operate the ten hospital campuses and other real estate we acquired.

Other 2015 Acquisitions

In 2015, we made other investments totaling approximately $612 million , including the acquisition of eleven triple-net

leased properties; nine MOBs (including eight MOBs that we had previously accounted for as investments in unconsolidated entities; see “ NOTE 7—INVESTMENTS IN UNCONSOLIDATED ENTITIES ”) and 12 skilled nursing facilities (all of which were disposed of as part of the CCP Spin-Off).

Completed Developments

During 2015, we completed the development of one triple-net leased seniors housing community, representing $9.3 million of net real estate property on our Consolidated Balance Sheets as of December 31, 2015.

104

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Estimated Fair Value

We are accounting for our 2015 acquisitions under the acquisition method in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, which we determined using level two and level three inputs:



	Triple-Net Leased Properties		Senior Living Operations		Office Operations		Total
	(In thousands)
Land and improvements	$	190,566	$	70,713	$	173,307	$	434,586
Buildings and improvements	1,726,063		703,080		1,214,546		3,643,689
Acquired lease intangibles	169,362		83,867		184,540		437,769
Other assets	174,093		272,888		402,734		849,715
Total assets acquired	2,260,084		1,130,548		1,975,127		5,365,759
Notes payable and other debt	—		77,940		99,917		177,857
Other liabilities	45,924		45,408		46,565		137,897
Total liabilities assumed	45,924		123,348		146,482		315,754
Net assets acquired	2,214,160		1,007,200		1,828,645		5,050,005
Redeemable OP unitholder interests assumed							88,085
Cash acquired							59,584
Equity issued							2,216,355
Total cash used							$	2,685,981

Included in other assets above is $746.9 million of goodwill, which represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed as of the acquisition date. A substantial amount of this goodwill was due to an increase in our stock price between the announcement date and closing dates of the HCT acquisition. Goodwill has been allocated to our reportable business segments based on the respective fair value of the net assets acquired, as follows: triple-net leased properties - $133.6 million ; senior living operations - $219.1 million ; and office operations - $394.2 million .

Aggregate Revenue and NOI

For the year ended December 31, 2015, aggregate revenue and NOI derived from our 2015 real estate acquisitions during our period of ownership were $327.0 million and $201.9 million , respectively, excluding revenue and NOI for any assets contributed in the CCP Spin-Off.

Transaction Costs

Transaction costs are expensed as incurred and included in merger-related expenses and deal costs in our Consolidated Statements of Income. For the years ending December 31, 2015 and 2014, we expensed as incurred, $99.0 million and $10.8 million , respectively, costs related to our completed 2015 transactions, $4.1 million and $1.4 million of which are reported within discontinued operations. These transaction costs exclude any separation costs associated with the CCP Spin-Off (refer to “ NOTE 5—DISPOSITIONS ”).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited Pro Forma

The following table illustrates the effect on net income and earnings per share if we had consummated the HCT acquisition and Ardent Transaction as of January 1, 2014 and excludes assets that were acquired in the HCT acquisition but subsequently disposed of as part of the CCP Spin-Off.



	For the Years Ended December 31,
	2015		2014
	(In thousands, except per share amounts)
Revenues	$	3,361,658	$	3,164,100
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	475,017	$	465,671
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	1.44	$	1.44
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	1.42	$	1.43
Weighted average shares used in computing earnings per common share:
Basic	330,311		322,590
Diluted	334,007		326,210

Acquisition-related costs related to the HCT acquisition and the Ardent Transaction are not expected to have a continuing impact and therefore have been excluded from these pro forma results. The pro forma results also do not include the impact of any synergies that may be achieved in the HCT acquisition and the Ardent Transaction, any lower costs of borrowing resulting from the acquisition or any strategies that management may consider in order to continue to efficiently manage our operations, nor do they give pro forma effect to any other acquisitions, dispositions or capital markets transactions that we completed during the periods presented. These pro forma results are not necessarily indicative of the operating results that would have been obtained had the HCT acquisition and Ardent Transaction occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

2014 Acquisitions

Holiday Canada Acquisition

In August 2014, we acquired 29 seniors housing communities located in Canada from Holiday Retirement (the “Holiday Canada Acquisition”) for a purchase price of CAD 957.0 million . We also paid CAD 26.9 million in costs relating to the early repayment of debt at closing. We funded the Holiday Canada Acquisition initially through borrowings under a CAD 791.0 million unsecured term loan that we incurred in July 2014 (and subsequently repaid primarily through a private placement of senior notes in Canada) and the assumption of CAD 193.7 million of debt.

Other 2014 Acquisitions

During the year ended December 31, 2014, we also acquired three triple-net leased private hospitals (located in the United Kingdom), 26 triple-net leased seniors housing communities and four seniors housing communities that are being operated by independent third-party managers for aggregate consideration of approximately $812.0 million . We also paid $18.8 million in costs relating to the early repayment of debt at closing of the applicable transactions. In addition, we acquired a construction design, planning and consulting business to complement our office operations through the issuance of 148,241 shares of our common stock.

Completed Developments

During 2014, we completed the development of two MOBs and one seniors housing community, representing $41.2 million of net real estate property on our Consolidated Balance Sheets as of December 31, 2014.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Estimated Fair Value

We are accounting for our 2014 acquisitions under the acquisition method in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed in our 2014 real estate acquisitions, which we determined using level two and level three inputs:



	Triple-Net Leased Properties		Senior Living Operations		Total
	(In thousands)
Land and improvements	$	45,586	$	100,281	$	145,867
Buildings and improvements	546,849		1,081,630		1,628,479
Acquired lease intangibles	28,883		36,452		65,335
Other assets	227		12,394		12,621
Total assets acquired	621,545		1,230,757		1,852,302
Notes payable and other debt	12,927		228,150		241,077
Other liabilities	8,609		124,468		133,077
Total liabilities assumed	21,536		352,618		374,154
Net assets acquired	600,009		878,139		1,478,148
Cash acquired	227		8,704		8,931
Total cash used	$	599,782	$	869,435	$	1,469,217

Aggregate Revenue and NOI

For the year ended December 31, 2014, aggregate revenues and NOI derived from our 2014 real estate acquisitions (for our period of ownership) were $75.9 million and $41.5 million , respectively.

Transaction Costs

As of December 31, 2014, we had incurred a total of $26.2 million of acquisition-related costs related to our completed 2014 acquisitions, all of which were expensed as incurred and included in merger-related expenses and deal costs in our Consolidated Statements of Income for the applicable periods. For the year ended December 31, 2014, we expensed $23.8 million of these acquisition-related costs related to our completed 2014 acquisitions.

NOTE 5—DISPOSITIONS

2016 Activity

During the year ended December 31, 2016, we sold 29 triple-net leased properties, one seniors housing community included in our senior living operations reportable business segment and six MOBs for aggregate consideration of $300.8 million . We recognized a gain on the sales of these assets of $98.2 million , net of taxes.

Subsequent to December 31, 2016, we sold five triple-net leased properties for aggregate consideration of $85.0 million and we estimate recognizing a gain on the sale of these assets of $43.3 million .

2015 Activity

During 2015, we sold 39 triple-net leased properties and 26 MOBs for aggregate consideration of $541.0 million , including lease termination fees of $6.0 million (included within triple-net leased rental income in our Consolidated Statements of Income). We recognized a gain on the sales of these assets of $46.3 million (net of taxes), of which $27.4 million is being deferred due to one secured loan ( $78.4 million ) and one non-mortgage loan ( $20.0 million ) we made to the buyers in connection with the sales of certain assets. These deferred gains will be recognized into income as principal payments are made on the loans over their respective terms.

2014 Activity

During 2014, we sold 16 triple-net leased properties, two seniors housing communities included in our seniors housing operations reportable business segment and four MOBs for aggregate consideration of $118.2 million . We recognized a net gain on the sales of these assets of $21.3 million , $1.5 million of which is reported within discontinued operations in our Consolidated Statements of Income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assets Held for Sale

The table below summarizes our real estate assets classified as held for sale as of December 31, 2016 and 2015 , including the amounts reported within other assets and accounts payable and other liabilities on our Consolidated Balance Sheets.



	December 31, 2016					December 31, 2015
	Number of Properties Held for Sale	Assets Held for Sale		Liabilities Held for Sale		Number of Properties Held for Sale	Assets Held for Sale		Liabilities Held for Sale
	(Dollars in thousands)
Triple-net leased properties	—	$	—	$	—	2	$	4,488	$	44
Office operations	7	53,151		1,462		8	68,619		24,759
Seniors living operations ⁽¹⁾	—	1,810		—		1	19,953		9,537
Total	7	$	54,961	$	1,462	11	$	93,060	$	34,340


⁽¹⁾	As of December 31, 2016, there is one vacant land parcel classified as held for sale.

Real Estate Impairment

We recognized impairments of $35.2 million , $42.2 million and $56.6 million for the years ended December 31, 2016 , 2015 and 2014 respectively, which are recorded primarily as a component of depreciation and amortization and relate primarily to our triple-net leased properties reportable business segment. Of these impairments, none , $13.0 million and $1.5 million for the years ended December 31, 2016 , 2015 and 2014 respectively were reported in discontinued operations in our Consolidated Statements of Income. Our recorded impairments were primarily the result of a change in our intent to hold the impaired assets. In most cases, we recognized an impairment in the periods in which our change in intent was made.

CCP Spin-Off

On August 17, 2015, we completed the CCP Spin-Off. In connection with the CCP Spin-Off, we disposed of 355 triple-net leased skilled nursing facilities and other healthcare assets operated by private regional and local care providers. The CCP Spin-Off was effectuated through a distribution of the common shares of CCP to holders of our common stock as of the distribution record date, and qualified as a tax-free distribution to our stockholders. For every four shares of Ventas common stock held as of the distribution record date of August 10, 2015, Ventas stockholders received one CCP common share on August 17, 2015. On August 17, 2015, just prior to the effective time of the spin-off, CCP (as our then wholly owned subsidiary) received approximately $1.4 billion of proceeds from a recently completed term loan and revolving credit facility. CCP paid us a distribution of $1.3 billion from these proceeds. We used this distribution from CCP to pay down our existing debt ( $1.1 billion ) and to pay for a portion of our quarterly installment of dividends to our stockholders ( $0.2 billion ).

The historical results of operations of the CCP properties as well as the related assets and liabilities have been presented as discontinued operations in the consolidated statements of operations and comprehensive income. Discontinued operations also include separation costs incurred to complete the CCP Spin-Off of $42.3 million and $0.2 million for the years ended December 31, 2015 and 2014, respectively. Separation costs for 2015 include $3.5 million of stock-based compensation expense representing the incremental fair value of previously vested stock-based compensation awards as of the spin date. In addition, the assets and liabilities of CCP are presented separately from assets and liabilities from continuing operations in the accompanying consolidated balance sheets. The accompanying consolidated statements of cash flows include within operating, investing and financing cash flows those activities which related to our period of ownership of the CCP properties.

108

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of the assets and liabilities of CCP at the CCP Spin-Off date:



	August 17, 2015		December 31, 2014
	(In thousands)
Assets
Net real estate investments	$	2,588,255	$	2,274,310
Cash and cash equivalents	1,749		2,710
Goodwill	135,446		88,959
Assets held for sale	7,610		8,435
Other assets	15,089		16,596
Total assets	2,748,149		2,391,010

Liabilities
Accounts payable and other liabilities	217,760		204,359
Liabilities related to assets held for sale	985		1,288
Total liabilities	218,745		205,647

Net assets	$	2,529,404	$	2,185,363

Summarized financial information for CCP discontinued operations for the years ended December 31, 2016, 2015 and 2014 respectively is as follows:



	2016			2015		2014
	(In thousands)
Revenues
Rental income	$	—		$	196,848	$	295,767
Income from loans and investments	—			2,148		3,392
Interest and other income	—			63		2
	—			199,059		299,161
Expenses
Interest	—			61,613		87,648
Depreciation and amortization	—			79,479		101,760
General, administrative and professional fees	—			9		9
Merger-related expenses and deal costs	922			46,402		1,746
Other	—			1,332		13,184
	922			188,835		204,347
Income before real estate dispositions and noncontrolling interest	(922		)	10,224		94,814
Gain (loss) on real estate dispositions	—			—		—
Net income from discontinued operations	(922		)	10,224		94,814
Net income attributable to noncontrolling interest	—			120		185
Net income from discontinued operations attributable to common stockholders	$	(922	)	$	10,104	$	94,629

There were no capital and development project expenditures relating to CCP for the year ended December 31, 2016. Capital and development project expenditures relating to CCP for the years ended December 31, 2015 and 2014 were $21.8 million and $17.2 million , respectively. Other than capital and development project expenditures there were no other significant non-cash operating or investing activities relating to CCP.

We and CCP entered into a transition services agreement prior to the CCP Spin-Off pursuant to which we and our subsidiaries provide to CCP, on an interim, transitional basis, various services. The services provided include information technology, accounting and tax services. The overall fee charged by us for such services (the "Service Fee") was $2.5 million for one year. We recognized income of $1.6 million and $0.9 million , for the years ended December 31, 2016 and 2015,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

respectively, relating to the Service Fee, which was payable in four quarterly installments. The transition services agreement terminated on August 31, 2016 .

Discontinued Operations - Other than CCP Spin-Off

In addition to the amounts reported within discontinued operations relating to the CCP Spin-Off, we reported net income from discontinued operations attributable to common stockholders of zero , $1.0 million , and $5.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

NOTE 6—LOANS RECEIVABLE AND INVESTMENTS

As of December 31, 2016 and 2015 , we had $754.6 million and $895.0 million , respectively, of net loans receivable and investments relating to seniors housing and healthcare operators or properties. The following is a summary of our net loans receivable and investments as of December 31, 2016 and 2015 , including amortized cost, fair value and unrealized gains on available-for-sale investments:



	December 31, 2016
	Carrying Amount		Amortized Cost		Fair Value		Unrealized Gain
	(In thousands)

Secured mortgage loans and other	$	646,972	$	646,972	$	655,981	$	—
Government-sponsored pooled loan investments ⁽¹⁾	55,049		53,810		55,049		1,239
Total investments reported as Secured loans receivable and investments, net	702,021		700,782		711,030		1,239

Non-mortgage loans receivable, net	52,544		52,544		53,626		—
Total investments reported as Other assets	52,544		52,544		53,626		—
Total loans receivable and investments, net	$	754,565	$	753,326	$	764,656	$	1,239



	December 31, 2015
	Carrying Amount		Amortized Cost		Fair Value		Unrealized Gain
	(In thousands)

Secured mortgage loans and other	$	793,433	$	793,433	$	816,849	$	—
Government-sponsored pooled loan investments ⁽¹⁾	63,679		62,130		63,679		1,549
Total investments reported as Secured loans receivable and investments, net	857,112		855,563		880,528		1,549

Non-mortgage loans receivable, net	37,926		37,926		38,806		—
Total investments reported as Other assets	37,926		37,926		38,806		—
Total loans receivable and investments, net	$	895,038	$	893,489	$	919,334	$	1,549


⁽¹⁾	Investments in government-sponsored pooled loans have contractual maturity dates in 2023.

2016 Activity

During the year ended December 31, 2016 , we received aggregate proceeds of $309.0 million in final repayment of three secured loans receivable and partial repayment of one secured loan receivable and recognized gains of $9.6 million on the repayment of these loans receivable in income from loans and investments in our Consolidated Statements of Income.

In connection with the Life Sciences Acquisition, we acquired three non-mortgage loans receivable.

In February 2016, we made a $140.0 million secured mezzanine loan investment, at par, relating to Class A life sciences properties in California and Massachusetts, that has an annual interest rate of 9.95% and matures in 2021 .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2015 Activity

We issued one secured loan ( $78.4 million ) and one non-mortgage loan ( $20.0 million ) to buyers in connection with the sales of certain assets. In June 2015, we sold our $71.0 million investment in senior unsecured corporate bonds for $76.8 million . We recognized a gain of $5.8 million that is included within income from loans and investments in our Consolidated Statements of Income for the year ended December 31, 2015 . This gain includes $5.0 million that was previously unrealized within accumulated other comprehensive income on our Consolidated Balance Sheets as of December 31, 2014.

During the year ended December 31, 2015 , we received aggregate proceeds of $97.0 million in final repayment of three secured and one non-mortgage loans receivable. We recognized gains aggregating $1.9 million on the repayment of these loans receivable that are recorded in income from loans and investments in our Consolidated Statements of Income for the year ended December 31, 2015 .

NOTE 7—INVESTMENTS IN UNCONSOLIDATED ENTITIES

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We are not required to consolidate these entities because our joint venture partners have significant participating rights, nor are these entities considered VIEs, as they are controlled by equity holders with sufficient capital. At December 31, 2016 , we had ownership interests (ranging from 5% to 25% ) in joint ventures that owned 39 properties, excluding properties under development and properties classified as held for sale. We account for our interests in real estate joint ventures, as well as our 34% interest in Atria and 9.9% interest in Ardent (which are included within other assets on our Consolidated Balance Sheets), under the equity method of accounting.

With the exception of our interests in Atria and Ardent, we provide various services to each unconsolidated entity in exchange for fees and reimbursements. Total management fees earned in connection with these entities were $6.7 million , $7.8 million and $8.4 million for the years ended December 31, 2016 , 2015 and 2014 , respectively (which is included in office building and other services revenue in our Consolidated Statements of Income).

In October 2015, we acquired the 95% controlling interests in eight MOBs from a joint venture entity in which we have a 5% interest and that we account for as an equity method investment. In connection with this acquisition, we re-measured our previously held equity interest (associated with the acquired MOBs) and recognized a loss of $0.2 million , which is included in income from unconsolidated entities in our Consolidated Statements of Income. Since the acquisition, operations relating to these properties have been consolidated in our Consolidated Statements of Income.

111

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8—INTANGIBLES

The following is a summary of our intangibles as of December 31, 2016 and 2015 :



	December 31, 2016				December 31, 2015
	Balance			Remaining Weighted Average Amortization Period in Years	Balance			Remaining Weighted Average Amortization Period in Years
	(Dollars in thousands)
Intangible assets:
Above market lease intangibles	$	184,993		6.9	$	155,161		7.0
In-place and other lease intangibles	1,325,636			23.6	1,189,261			20.9
Goodwill	1,033,225			N/A	1,047,497			N/A
Other intangibles	35,783			11.3	35,792			8.6
Accumulated amortization	(769,558		)	N/A	(655,176		)	N/A
Net intangible assets	$	1,810,079		21.5	$	1,772,535		19.2
Intangible liabilities:
Below market lease intangibles	$	345,103		14.1	$	256,034		14.2
Other lease intangibles	40,843			38.5	35,925			30.1
Accumulated amortization	(133,468		)	N/A	(113,647		)	N/A
Purchase option intangibles	3,568			N/A	3,568			N/A
Net intangible liabilities	$	256,046		15.9	$	181,880		15.6

N/A—Not Applicable

Above market lease intangibles and in-place and other lease intangibles are included in acquired lease intangibles within real estate investments on our Consolidated Balance Sheets. Other intangibles (including non-compete agreements, trade names and trademarks) are included in other assets on our Consolidated Balance Sheets. Below market lease intangibles, other lease intangibles and purchase option intangibles are included in accounts payable and other liabilities on our Consolidated Balance Sheets. For the years ended December 31, 2016 , 2015 and 2014 , our net amortization related to these intangibles was $104.5 million , $142.7 million and $74.6 million , respectively. The estimated net amortization related to these intangibles for each of the next five years is as follows: 2017 — $66.1 million ; 2018 — $53.7 million ; 2019 — $44.4 million ; 2020 — $38.5 million ; and 2021 — $36.2 million .

The change in the carrying amount of goodwill, by segment, during the year ended December 31, 2016 was as follows:



	Triple-Net Leased Properties			Senior Living Operations			Office Operations			Total
	(In thousands)
Goodwill as of December 31, 2015	$	312,315		$	260,882		$	474,300		$	1,047,497
Partial disposal of reporting unit	(5,582		)	(1,400		)	(4,402		)	(11,384		)
Currency translation adjustments and other	(2,888		)	—			—			(2,888		)
Goodwill as of December 31, 2016	$	303,845		$	259,482		$	469,898		$	1,033,225

112

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9—OTHER ASSETS

The following is a summary of our other assets as of December 31, 2016 and 2015 :



	2016		2015
	(In thousands)
Straight-line rent receivables, net	$	244,580	$	219,064
Non-mortgage loans receivable, net	52,544		37,926
Other intangibles, net	8,190		13,224
Investment in unconsolidated operating entities	28,431		28,199
Other	184,619		113,990
Total other assets	$	518,364	$	412,403

113

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10—SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt as of December 31, 2016 and 2015 :



	2016			2015
	(In thousands)
Unsecured revolving credit facility ⁽¹⁾	$	146,538		$	180,683
1.55% Senior Notes due 2016	—			550,000
1.250% Senior Notes due 2017	300,000			300,000
2.00% Senior Notes due 2018	700,000			700,000
Unsecured term loan due 2018 ⁽²⁾	200,000			200,000
Unsecured term loan due 2019 ⁽²⁾	371,215			468,477
4.00% Senior Notes due 2019	600,000			600,000
3.00% Senior Notes, Series A due 2019 ⁽³⁾	297,841			289,038
2.700% Senior Notes due 2020	500,000			500,000
Unsecured term loan due 2020	900,000			900,000
4.750% Senior Notes due 2021	700,000			700,000
4.25% Senior Notes due 2022	600,000			600,000
3.25% Senior Notes due 2022	500,000			500,000
3.300% Senior Notes due 2022 ⁽³⁾	186,150			180,649
3.125% Senior Notes due 2023	400,000			—
3.750% Senior Notes due 2024	400,000			400,000
4.125% Senior Notes, Series B due 2024 ⁽³⁾	186,150			180,649
3.500% Senior Notes due 2025	600,000			600,000
4.125% Senior Notes due 2026	500,000			500,000
3.25% Senior Notes due 2026	450,000			—
6.90% Senior Notes due 2037	52,400			52,400
6.59% Senior Notes due 2038	22,973			22,973
5.45% Senior Notes due 2043	258,750			258,750
5.70% Senior Notes due 2043	300,000			300,000
4.375% Senior Notes due 2045	300,000			300,000
Mortgage loans and other ⁽⁴⁾	1,718,897			1,987,401
Total	11,190,914			11,271,020
Deferred financing costs, net	(61,304		)	(69,121		)
Unamortized fair value adjustment	25,224			33,570
Unamortized discounts	(27,508		)	(28,473		)
Senior notes payable and other debt	$	11,127,326		$	11,206,996


⁽¹⁾	$146.5 million and $9.7 million of aggregate borrowings are denominated in Canadian dollars as of December 31, 2016 and 2015 , respectively.


⁽²⁾	These amounts represent in aggregate the $571.2 million of unsecured term loan borrowings under our unsecured credit facility, of which $92.6 million included in the 2019 tranche is in the form of Canadian dollars.


⁽³⁾	These borrowings are in the form of Canadian dollars.


⁽⁴⁾	As of December 31, 2016 , there was no mortgage debt related to real estate assets classified as held for sale. Balance as of December 31, 2015 excludes $22.9 million of mortgage debt related to real estate assets classified as held for sale, which is included in liabilities related to assets held for sale on our Consolidated Balance Sheets.

114

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unsecured Revolving Credit Facility and Unsecured Term Loans

Our unsecured credit facility is comprised of a $2.0 billion revolving credit facility priced at LIBOR plus 1.0% as of December 31, 2016 , and a $200.0 million four -year term loan and a $371.2 million five -year term loan, each priced at LIBOR plus 1.05% as of December 31, 2016 . The revolving credit facility matures in January 2018, but may be extended, at our option subject to the satisfaction of certain conditions, for an additional period of one year. The $200.0 million and $371.2 million term loans mature in January 2018 and January 2019, respectively. The unsecured credit facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.5 billion .

Our unsecured credit facility imposes certain customary restrictions on us, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers and dissolutions; (v) certain dividend, distribution and other payments; (vi) permitted businesses; (vii) transactions with affiliates; (viii) agreements limiting certain liens; and (ix) the maintenance of certain consolidated total leverage, secured debt leverage, unsecured debt leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth, and contains customary events of default.

As of December 31, 2016 , we also had a $900.0 million term loan due 2020 priced at LIBOR plus 97.5 basis points.

Senior Notes

As of December 31, 2016 , we had outstanding $7.1 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”) ( $3.9 billion of which was co-issued by Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation), approximately $75.4 million aggregate principal amount of senior notes issued by Nationwide Health Properties, Inc. (“NHP”) and assumed by our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, in connection with our acquisition of NHP, and CAD 900.0 million aggregate principal amount of senior notes issued by our subsidiary, Ventas Canada Finance Limited. All of the senior notes issued by Ventas Realty and Ventas Canada Finance Limited are unconditionally guaranteed by Ventas, Inc.

In May 2015, we repaid in full, at par, $234.4 million aggregate principal amount then outstanding of our 6% senior notes due 2015 upon maturity.

115

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

balance then outstanding of our 1.55% senior notes due September 2016 of $94.5 million and recognized a loss on extinguishment of debt of $0.3 million .

Ventas Realty’s senior notes are part of our and Ventas Realty’s general unsecured obligations, ranking equal in right of payment with all of our and Ventas Realty’s existing and future senior obligations and ranking senior in right of payment to all of our and Ventas Realty’s existing and future subordinated indebtedness. However, Ventas Realty’s senior notes are effectively subordinated to our and Ventas Realty’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Realty’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Realty and, with respect to those senior notes co-issued by Ventas Capital Corporation, Ventas Capital Corporation).

Ventas Canada Finance Limited’s senior notes are part of our and Ventas Canada Finance Limited’s general unsecured obligations, ranking equal in right of payment with all of Ventas Canada Finance Limited’s existing and future subordinated indebtedness. However, Ventas Canada Finance Limited’s senior notes are effectively subordinated to our and Ventas Canada Finance Limited’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Canada Finance Limited’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Canada Finance Limited).

NHP LLC’s senior notes are part of NHP LLC’s general unsecured obligations, ranking equal in right of payment with all of NHP LLC’s existing and future senior obligations and ranking senior to all of NHP LLC’s existing and future subordinated indebtedness. However, NHP LLC’s senior notes are effectively subordinated to NHP LLC’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. NHP LLC’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of its subsidiaries.

Ventas Realty, Ventas Canada Finance Limited and NHP LLC may redeem each series of their respective senior notes (other than NHP LLC’s 6.90% senior notes due 2037 and 6.59% senior notes due 2038), in whole at any time or in part from time to time, prior to maturity at the redemption prices set forth in the applicable indenture (which include, in many instances, a make-whole premium), plus, in each case, accrued and unpaid interest thereon to the redemption date.

NHP LLC’s 6.90% senior notes due 2037 are subject to repurchase at the option of the holders, at par, on October 1 in each of 2017 and 2027, and its 6.59% senior notes due 2038 are subject to repurchase at the option of the holders, at par, on July 7 in each of 2018, 2023 and 2028.

Mortgages

At December 31, 2016 , we had 113 mortgage loans outstanding in the aggregate principal amount of $1.7 billion and secured by 123 of our properties. Of these loans, 98 loans in the aggregate principal amount of $1.4 billion bear interest at fixed rates ranging from 3.0% to 8.6% per annum, and 15 loans in the aggregate principal amount of $292.1 million bear interest at variable rates ranging from 1.5% to 3.9% per annum as of December 31, 2016 . At December 31, 2016 , the weighted average annual rate on our fixed rate mortgage loans was 5.6% , and the weighted average annual rate on our variable rate mortgage loans was 2.1% . Our mortgage loans had a weighted average maturity of 5.7 years as of December 31, 2016 .

During 2014, we assumed or incurred mortgage debt of $246.8 million and repaid in full mortgage loans outstanding in the aggregate principal amount of $398.0 million , and recognized a net loss on extinguishment of debt of $2.3 million in connection with these repayments.

116

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Scheduled Maturities of Borrowing Arrangements and Other Provisions

As of December 31, 2016 , our indebtedness had the following maturities:



	Principal Amount Due at Maturity		Unsecured Revolving Credit Facility ⁽¹⁾		Scheduled Periodic Amortization		Total Maturities
	(In thousands)
2017	$	614,438	$	—	$	25,970	$	640,408
2018	1,101,879		146,538		21,085		1,269,502
2019	1,693,640		—		14,607		1,708,247
2020	1,416,913		—		11,620		1,428,533
2021	774,318		—		10,127		784,445
Thereafter ⁽²⁾	5,242,559		—		117,220		5,359,779
Total maturities	$	10,843,747	$	146,538	$	200,629	$	11,190,914


⁽¹⁾	At December 31, 2016 , we had $286.7 million of unrestricted cash and cash equivalents, for $140.2 million of net available cash.


⁽²⁾	Includes $52.4 million aggregate principal amount of 6.90% senior notes due 2037 that is subject to repurchase, at the option of the holders, on October 1 in each of 2017 and 2027, and $23.0 million aggregate principal amount of 6.59% senior notes due 2038 that is subject to repurchase, at the option of the holders, on July 7 in each of 2018, 2023 and 2028.

The instruments governing our outstanding indebtedness contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things: (i) incur debt; (ii) make certain dividends, distributions and investments; (iii) enter into certain transactions; and/or (iv) merge, consolidate or sell certain assets. Ventas Realty’s and Ventas Canada Finance Limited’s senior notes also require us and our subsidiaries to maintain total unencumbered assets of at least 150% of our unsecured debt. Our unsecured credit facility also requires us to maintain certain financial covenants pertaining to, among other things, our consolidated total leverage, secured debt, unsecured debt, fixed charge coverage and net worth.

As of December 31, 2016 , we were in compliance with all of these covenants.

Derivatives and Hedging

In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.

For interest rate exposures, we use derivatives primarily to fix the rate on our variable rate debt and to manage our borrowing costs. We do not use derivative instruments for trading or speculative purposes, and we have a policy of entering into contracts only with major financial institutions based upon their credit ratings and other factors. When considered together with the underlying exposure that the derivative is designed to hedge, we do not expect that the use of derivatives in this manner would have any material adverse effect on our future financial condition or results of operations.

As of December 31, 2016 , our variable rate debt obligations of $1.7 billion reflect, in part, the effect of $150.8 million notional amount of interest rate swaps with a maturity of March 22, 2018 that effectively convert fixed rate debt to variable rate debt. As of December 31, 2016 , our fixed rate debt obligations of $9.5 billion reflect, in part, the effect of $236.5 million notional amount of interest rate swaps with maturities ranging from October 1, 2018 to August 3, 2020, in each case that effectively convert variable rate debt to fixed rate debt.

117

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unamortized Fair Value Adjustment

As of December 31, 2016 , the unamortized fair value adjustment related to the long-term debt we assumed in connection with various acquisitions was $25.2 million and will be recognized as effective yield adjustments over the remaining terms of the instruments. The estimated aggregate amortization of the fair value adjustment related to long-term debt (which is reflected as a reduction of interest expense) was $10.7 million for the year ended December 31, 2016 and for each of the next five years will be as follows: 2017 — $6.9 million ; 2018 — $3.1 million ; 2019 — $2.3 million ; 2020 — $1.9 million ; and 2021 — $1.3 million .

NOTE 11—FAIR VALUES OF FINANCIAL INSTRUMENTS

As of December 31, 2016 and 2015 , the carrying amounts and fair values of our financial instruments were as follows:



	2016				2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Assets:
Cash and cash equivalents	$	286,707	$	286,707	$	53,023	$	53,023
Secured mortgage loans and other	646,972		655,981		793,433		816,849
Non-mortgage loans receivable, net	52,544		53,626		37,926		38,806
Government-sponsored pooled loan investments	55,049		55,049		63,679		63,679
Derivative instruments	3,302		3,302		—		—
Liabilities:
Senior notes payable and other debt, gross	11,190,914		11,369,440		11,271,020		11,384,880
Derivative instruments	2,316		2,316		2,696		2,696
Redeemable OP unitholder interests	177,177		177,177		188,546		188,546

For a discussion of the assumptions considered, refer to “ NOTE 2—ACCOUNTING POLICIES .” The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented above are not necessarily indicative of the amounts we would realize in a current market exchange.

NOTE 12—STOCK-BASED COMPENSATION

Compensation Plans

We currently have: four plans under which outstanding options to purchase common stock, shares of restricted stock or restricted stock units have been, or may in the future be, granted to our officers, employees and non-employee directors (the 2000 Incentive Compensation Plan (Employee Plan), the 2006 Incentive Plan, the 2006 Stock Plan for Directors, and the 2012 Incentive Plan); one plan under which executive officers may receive common stock in lieu of compensation (the Executive Deferred Stock Compensation Plan); and one plan under which certain non-employee directors have received or may receive common stock in lieu of director fees (the Nonemployee Directors’ Deferred Stock Compensation Plan). These plans are referred to collectively as the “Plans.”

During the year ended December 31, 2016 , we were permitted to issue shares and grant options, restricted stock and restricted stock units only under the Executive Deferred Stock Compensation Plan, the Nonemployee Directors’ Deferred Stock Compensation Plan and the 2012 Incentive Plan. The 2006 Incentive Plan and the 2006 Stock Plan for Directors (collectively, the “2006 Plans”) expired on December 31, 2012, and no additional grants were permitted under those Plans after that date.

118

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The number of shares initially reserved for issuance and the number of shares available for future grants or issuance under these Plans as of December 31, 2016 were as follows:


•	Executive Deferred Stock Compensation Plan— 0.6 million shares were reserved initially for issuance to our executive officers in lieu of the payment of all or a portion of their salary, at their option, and 0.6 million shares were available for future issuance as of December 31, 2016 .


•	Nonemployee Directors’ Deferred Stock Compensation Plan— 0.6 million shares were reserved initially for issuance to nonemployee directors in lieu of the payment of all or a portion of their retainer and meeting fees, at their option, and 0.5 million shares were available for future issuance as of December 31, 2016 .

•

2012 Incentive Plan— 10.5 million shares (plus the number of shares or options outstanding under the 2006 Plans as of December 31, 2012 that were or are subsequently forfeited or expire unexercised) were reserved initially for grants or issuance to employees and non-employee directors, and 6.5 million shares (plus the number of shares or options outstanding under the 2006 Plans as of December 31, 2016 that were or are subsequently forfeited or expire unexercised) were available for future issuance as of December 31, 2016 .

Outstanding options issued under the Plans are exercisable at the market price on the date of grant, expire ten years from the date of grant, and vest or have vested over periods of two or three years. If provided in the applicable Plan or award agreement, the vesting of stock options may accelerate upon a change of control (as defined in the applicable Plan) of Ventas, Inc. and other specified events.

In connection with the NHP acquisition, we assumed certain outstanding options, shares of restricted stock and restricted stock units previously issued to NHP employees pursuant to the Nationwide Health Properties, Inc. 2005 Performance Incentive Plan, as amended (the “NHP Plan”). Any remaining outstanding awards continue to be subject to the terms and conditions of the NHP Plan and the applicable award agreements.

On January 18, 2017, the Executive Compensation Committee (the “Compensation Committee”) of our Board of Directors approved a 2017 long-term incentive compensation program for our named executive officers (the “2017 LTIP”) pursuant to the 2012 Incentive Plan. Several changes were made covering 2017, including: (1) in prior years, long-term incentive compensation awards were granted following and based on the satisfaction of specified performance goals (i.e., “retrospective”), and in 2017, performance-based awards made pursuant to the 2017 LTIP generally will be earned at a higher or lower level based on future performance (i.e., “prospective”); and (2) certain transition awards and modified vesting provisions apply. Under the 2017 LTIP, the aggregate target award value for each named executive officer is allocated such that 60% of the value is performance-based, in the form of performance-based restricted stock units, and 40% of the value is in the form of time-based restricted stock units. The Compensation Committee has eliminated qualitative or discretionary goals from the 2017 LTIP, which previously comprised 50% of the award opportunity.

Stock Options

In determining the estimated fair value of our stock options as of the date of grant, we used the Black-Scholes option pricing model with the following assumptions:



	2016		2015		2014
Risk-free interest rate	0.93 - 1.27%		1.02 - 1.38%		1.3 - 1.4%
Dividend yield	5.50	%	5.00	%	5.00	%
Volatility factors of the expected market price for our common stock	19.1 - 20.6%		19.0 - 20.0%		17.8 - 18.0%
Weighted average expected life of options	4.0 years		4.0 years		4.17 years

119

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of stock option activity in 2016 :



	Shares (000’s)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Intrinsic Value ($000’s)
Outstanding as of December 31, 2015	3,052	$	52.62
Options granted	1,165	62.82
Options exercised	409	49.77
Options forfeited	2	58.84
Options expired	1	46.62
Outstanding as of December 31, 2016	3,805	56.05		7.2	$	30,379
Exercisable as of December 31, 2016	2,629	$	53.23	6.4	$	27,075

Compensation costs for all share-based awards are based on the grant date fair value and are recognized on a straight-line basis during the requisite service periods, with charges recorded in general and administrative expenses. Compensation costs related to stock options for the years ended December 31, 2016 , 2015 and 2014 were $6.2 million , $4.2 million and $4.7 million , respectively.

As of December 31, 2016 , we had $2.2 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. We expect to recognize that cost over a weighted average period of 1.18 years.

The weighted average grant date fair value of options issued during the years ended December 31, 2016 , 2015 and 2014 was $4.73 , $5.89 and $4.37 , respectively.

Aggregate proceeds received from options exercised under the Plans or the NHP Plan for the years ended December 31, 2016 , 2015 and 2014 were $20.4 million , $6.4 million and $26.2 million , respectively. The total intrinsic value at exercise of options exercised during the years ended December 31, 2016 , 2015 and 2014 was $8.0 million , $4.7 million and $19.3 million , respectively. There was no deferred income tax benefit for stock options exercised.

Restricted Stock and Restricted Stock Units

We recognize the fair value of shares of restricted stock and restricted stock units on the grant date of the award as stock-based compensation expense over the requisite service period, with charges to general and administrative expenses of approximately $14.7 million in 2016 , $15.2 million in 2015 and $16.2 million in 2014 . Restricted stock and restricted stock units generally vest over periods ranging from two to five years. If provided in the applicable Plan or award agreement, the vesting of restricted stock and restricted stock units may accelerate upon a change of control (as defined in the applicable Plan) of Ventas and other specified events.

A summary of the status of our non-vested restricted stock and restricted stock units as of December 31, 2016 , and changes during the year ended December 31, 2016 follows:



	Restricted Stock (000’s)	Weighted Average Grant Date Fair Value		Restricted Stock Units (000’s)	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2015	363	$	57.65	14	$	58.02
Granted	181	55.25		13	57.06
Vested	226	56.21		12	56.19
Forfeited	6	58.18		0	0.00
Nonvested at December 31, 2016	312	$	57.29	15	$	58.70

As of December 31, 2016 , we had $6.9 million of unrecognized compensation cost related to non-vested restricted stock and restricted stock units under the Plans. We expect to recognize that cost over a weighted average period of 1.40 years. The total fair value at the vesting date for restricted stock and restricted stock units that vested during the years ended December 31, 2016 , 2015 and 2014 was $13.9 million , $18.3 million and $17.7 million , respectively.

120

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Employee and Director Stock Purchase Plan

We have in effect an Employee and Director Stock Purchase Plan (“ESPP”) under which our employees and directors may purchase shares of our common stock at a discount. Pursuant to the terms of the ESPP, on each purchase date, participants may purchase shares of common stock at a price not less than 90% of the market price on that date (with respect to the employee tax-favored portion of the plan) and not less than 95% of the market price on that date (with respect to the additional employee and director portion of the plan). We initially reserved 3.0 million shares for issuance under the ESPP. As of December 31, 2016 , 0.1 million shares had been purchased under the ESPP and 2.9 million shares were available for future issuance.

Employee Benefit Plan

We maintain a 401(k) plan that allows eligible employees to defer compensation subject to certain limitations imposed by the Code. In 2016 , we made contributions for each qualifying employee of up to 3.5% of his or her salary, subject to certain limitations. During 2016 , 2015 and 2014 , our aggregate contributions were approximately $1.3 million , $1.2 million and $1.1 million , respectively.

NOTE 13—INCOME TAXES

We have elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 1999. We have also elected for certain of our subsidiaries to be treated as TRS entities, which are subject to federal, state and foreign income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note. Certain REIT entities are subject to foreign income tax.

Although we intend to continue to operate in a manner that will enable us to qualify as a REIT, such qualification depends upon our ability to meet, on a continuing basis, various distribution, stock ownership and other tests. During the years ended December 31, 2016 , 2015 and 2014 , our tax treatment of distributions per common share was as follows:



	2016		2015		2014
Tax treatment of distributions:
Ordinary income	$	2.68216	$	3.02368	$	2.61271
Qualified ordinary income	0.05794		0.01632		0.10474
Long-term capital gain	0.11613		—		0.16224
Unrecaptured Section 1250 gain	0.10877		—		0.08531
Distribution reported for 1099-DIV purposes	$	2.96500	$	3.04000	$	2.96500

We believe we have met the annual REIT distribution requirement by payment of at least 90% of our estimated taxable income for 2016 , 2015 and 2014 . Our consolidated benefit for income taxes for the years ended December 31, 2016 , 2015 and 2014 was as follows:



	2016			2015			2014
	(In thousands)
Current - Federal	$	(2,991	)	$	138		$	878
Current - State	1,241			1,453			—
Deferred - Federal	(19,539		)	(25,962		)	(3,338		)
Deferred - State	(3,634		)	(3,054		)	(1,772		)
Current - Foreign	1,067			953			327
Deferred - Foreign	(7,487		)	(12,812		)	(4,827		)
Total	$	(31,343	)	$	(39,284	)	$	(8,732	)

The income tax benefit for the year ended December 31, 2016 is due primarily to the income tax benefit of ordinary losses and the reversal of a net deferred tax liability at certain TRS entities, and the release of a tax reserve. The income tax benefit for the year ended December 31, 2015 primarily relates to the income tax benefit of ordinary losses related to certain TRS entities.

121

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Although the TRS entities have paid minimal cash federal income taxes for the year ended December 31, 2016 , their federal income tax liabilities may increase in future years as we exhaust net operating loss (“NOL”) carryforwards and as our senior living operations reportable business segment grows. Such increases could be significant.

A reconciliation of income tax expense and benefit, which is computed by applying the federal corporate tax rate for the years ended December 31, 2016 , 2015 and 2014 , to the income tax benefit is as follows:



	2016			2015			2014
	(In thousands)
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interest and income taxes	$	181,478		$	123,086		$	122,746
State income taxes, net of federal benefit	(1,022		)	(657		)	(1,152		)
Increase in valuation allowance	3,921			20,978			23,122
(Decrease) increase in ASC 740 income tax liability	(3,582		)	(462		)	878
Tax at statutory rate on earnings not subject to federal income taxes	(209,204		)	(185,648		)	(151,055		)
Foreign rate differential and foreign taxes	2,094			3,095			3,230
Change in tax status of TRS	(5,629		)	—			(7,380		)
Other differences	601			324			879
Income tax benefit	$	(31,343	)	$	(39,284	)	$	(8,732	)

In connection with the Holiday Canada Acquisition in 2014, the HCT and U.K. acquisitions in 2015, and the Life Sciences Acquisition in 2016, we established a beginning net deferred tax liability of $107.7 million , $32.3 million , $18.5 million and $9.4 million , respectively, related to temporary differences between the financial reporting and tax bases of assets acquired and liabilities assumed (primarily property, intangible and related assets, net of NOL carryforwards).

Each TRS is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of temporary differences and carryforwards (including the REIT carryforwards) included in the net deferred tax liabilities at December 31, 2016 , 2015 and 2014 are summarized as follows:



	2016			2015			2014
	(In thousands)
Property, primarily differences in depreciation and amortization, the tax basis of land assets and the treatment of interests and certain costs	$	(409,803	)	$	(413,566	)	$	(406,023	)
Operating loss and interest deduction carryforwards	589,326			564,091			398,859
Expense accruals and other	18,185			14,624			15,355
Valuation allowance	(514,349		)	(503,531		)	(352,528		)
Net deferred tax liabilities	$	(316,641	)	$	(338,382	)	$	(344,337	)

Our net deferred tax liability decreased $21.7 million during 2016 primarily due to the reversal of a net deferred tax liability at one TRS and the impact of TRS operating losses and currency translation adjustments, offset by $9.4 million of recorded deferred tax liability as a result of the Life Sciences Acquisition. Our net deferred tax liability decreased $6.0 million during 2015 primarily due to $51.8 million of recorded deferred tax liability as a result of the HCT, U.K. and Ardent acquisitions, offset by the impact of TRS operating losses and currency translation adjustments.

Due to uncertainty regarding the realization of certain deferred tax assets, we have established valuation allowances, primarily in connection with the NOL carryforwards related to the REIT and certain TRSs. The amounts related to NOLs at the REIT and TRS entities for 2016 , 2015 , and 2014 are $379.5 million and $84.7 million , $369.4 million and $85.5 million , and $251.1 million and $66.1 million , respectively. The REIT NOLs are subject to a full valuation allowance.

For the years ended December 31, 2016 and 2015 , the net difference between tax bases and the reported amount of REIT assets and liabilities for federal income tax purposes was approximately $4.4 billion and $4.7 billion , respectively, less than the book bases of those assets and liabilities for financial reporting purposes.

122

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A rollforward of valuation allowances, for the years ended December 31, 2016 , 2015 and 2014 , is as follows:



	2016			2015			2014
	(In thousands)
Beginning Balance	$	503,531		$	352,528		$	331,458
Additions:
Purchase accounting	—			172,932			—
Expenses ⁽¹⁾	6,589			21,375			25,199
Subtractions:
Purchase accounting	(15,671		)	—			—
Deductions ⁽¹⁾	(2,668		)	(397		)	(2,077		)
State income tax, net of Federal impact	536			529			2,998
REIT activity ⁽²⁾	22,840			(45,781		)	(3,583		)
Other activity (not resulting in expense or deduction)	(808		)	2,345			(1,467		)
Ending balance	$	514,349		$	503,531		$	352,528


⁽¹⁾	Generally, Expenses and Deductions are increases and decreases, respectively, in TRS valuation allowances, the latter being through utilization or release. Net amount equals increase in valuation allowance on reconciliation of income tax expense and benefit schedule above.


⁽²⁾	Includes primarily the increase and decrease of REIT Federal income tax attributes due to utilization, expiration and adjustments other than purchase accounting.

We are subject to corporate level taxes (“built-in gains tax”) for any asset dispositions during the five -year period immediately after the assets were owned by a C corporation (either prior to our REIT election, through stock acquisition or merger). The amount of income potentially subject to built-in gains tax is generally equal to the lesser of the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset or the actual amount of gain. Some, but not all, future gains could be offset by available NOL carryforwards.

Generally, we are subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2013 and subsequent years and are subject to audit by state taxing authorities for the year ended December 31, 2012 and subsequent years. We are also subject to audit in Canada for periods subsequent to the acquisition, and certain prior periods, with respect to the entities acquired in connection with the Sunrise and Holiday Canada acquisitions. We are subject to audit in the United Kingdom generally for the periods ended in and subsequent to 2015.

At December 31, 2016 , we had a combined NOL carryforward of $490.4 million related to the TRS entities and an NOL carryforward of $1.1 billion related to the REIT, including $18.6 million and $397.9 million of the REIT NOL carried over from the HCT and Ardent acquisitions, respectively. Additionally, $10.5 million of Federal income tax credits were carried over from the Ardent entities. These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. Certain NOL and credit carryforwards are limited as to their utilization by Section 382 of the Code. The NOL carryforwards have begun to expire annually for the REIT and begin to expire in 2024 with respect to the TRS entities.

As a result of our uncertainty regarding the use of existing REIT NOLs, we have not ascribed any net deferred tax benefit to REIT NOL carryforwards as of December 31, 2016 and 2015 . The IRS may challenge our entitlement to these tax attributes during its review of the tax returns for the previous tax years. We believe we are entitled to these tax attributes but cannot assure you as to the outcome of these matters.

123

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the activity related to our unrecognized tax benefits:



	2016			2015
	(In thousands)
Balance as of January 1	$	24,135		$	25,446
Additions to tax positions related to the current year	—			—
Additions to tax positions related to prior years	222			248
Subtractions to tax positions related to prior years	—			(677		)
Subtractions to tax positions related to settlements	—			—
Subtractions to tax positions as a result of the lapse of the statute of limitations	(3,407		)	(882		)
Balance as of December 31	$	20,950		$	24,135

Included in these unrecognized tax benefits of $21.0 million and $24.1 million at December 31, 2016 and 2015 , respectively, were $19.3 million and $22.5 million of tax benefits at December 31, 2016 and 2015 , respectively, that, if recognized, would reduce our annual effective tax rate. We accrued interest of $0.3 million related to the unrecognized tax benefits during 2016, but no penalties. We expect our unrecognized tax benefits to decrease by $4.3 million during 2017 , as a result of the lapse of the statute of limitations.

As a part of the transfer pricing structure in the normal course of business, the REIT enters into transactions with certain TRSs, such as leasing transactions, other capital financing and allocation of general and administrative costs, which transactions are intended to comply with Internal Revenue Service and foreign tax authority transfer pricing rules.

NOTE 14—COMMITMENTS AND CONTINGENCIES

Litigation

Proceedings against Tenants, Operators and Managers

From time to time, Brookdale Senior Living, Kindred, Atria, Sunrise and our other tenants, operators and managers are parties to certain legal actions, regulatory investigations and claims arising in the conduct of their business and operations. Even though we generally are not party to these proceedings, the unfavorable resolution of any such actions, investigations or claims could, individually or in the aggregate, materially adversely affect such tenants’, operators’ or managers’ liquidity, financial condition or results of operations and their ability to satisfy their respective obligations to us, which, in turn, could have a Material Adverse Effect on us.

Proceedings Indemnified and Defended by Third Parties

From time to time, we are party to certain legal actions, regulatory investigations and claims for which third parties are contractually obligated to indemnify, defend and hold us harmless. The tenants of our triple-net leased properties and, in some cases, their affiliates are required by the terms of their leases and other agreements with us to indemnify, defend and hold us harmless against certain actions, investigations and claims arising in the course of their business and related to the operations of our triple-net leased properties. In addition, third parties from whom we acquired certain of our assets and, in some cases, their affiliates are required by the terms of the related conveyance documents to indemnify, defend and hold us harmless against certain actions, investigations and claims related to the acquired assets and arising prior to our ownership or related to excluded assets and liabilities. In some cases, a portion of the purchase price consideration is held in escrow for a specified period of time as collateral for these indemnification obligations. We are presently being defended by certain tenants and other obligated third parties in these types of matters. We cannot assure you that our tenants, their affiliates or other obligated third parties will continue to defend us in these matters, that our tenants, their affiliates or other obligated third parties will have sufficient assets, income and access to financing to enable them to satisfy their defense and indemnification obligations to us or that any purchase price consideration held in escrow will be sufficient to satisfy claims for which we are entitled to indemnification. The unfavorable resolution of any such actions, investigations or claims could, individually or in the aggregate, materially adversely affect our tenants’ or other obligated third parties’ liquidity, financial condition or results of operations and their ability to satisfy their respective obligations to us, which, in turn, could have a Material Adverse Effect on us.

Proceedings Arising in Connection with Senior Living and Office Operations; Other Litigation

From time to time, we are party to various legal actions, regulatory investigations and claims (some of which may not be insured and some of which may allege large damage amounts) arising in connection with our senior living and office operations or otherwise in the course of our business. In limited circumstances, the manager of the applicable seniors housing

124

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

community, MOB or life science innovation center, may be contractually obligated to indemnify, defend and hold us harmless against such actions, investigations and claims. It is the opinion of management that, except as otherwise set forth in this Note 14 , the disposition of any such actions, investigations and claims that are currently pending will not, individually or in the aggregate, have a Material Adverse Effect on us. However, regardless of their merits, we may be forced to expend significant financial resources to defend and resolve these matters. We are unable to predict the ultimate outcome of these actions, investigations and claims, and if management’s assessment of our liability with respect thereto is incorrect, such actions, investigations and claims could have a Material Adverse Effect on us.

Certain Obligations, Liabilities and Litigation

We may be subject to various obligations, liabilities and litigation assumed in connection with or arising out of our acquisitions or otherwise arising in connection with our business, some of which may be indemnifiable by third parties. If these liabilities are greater than expected or were not known to us at the time of acquisition, if we are not entitled to indemnification, or if the responsible third party fails to indemnify us, such obligations, liabilities and litigation could have a Material Adverse Effect on us. In addition, in connection with the sale or leasing of our properties, we may incur various obligations and liabilities, including indemnification obligations to the buyer or tenant, relating to the operations of those properties, which could have a Material Adverse Effect on us.

Other

With respect to certain of our properties, we are subject to operating and ground lease obligations that generally require fixed monthly or annual rent payments and may include escalation clauses and renewal options. These leases have terms that expire during the next 85 years, excluding extension options.

As of December 31, 2016 , our future minimum lease obligations under non-cancelable operating and ground leases were as follows:



	Lease Payments
	(In thousands)
2017	$	28,146
2018	24,814
2019	21,593
2020	20,766
2021	20,105
Thereafter	628,571
Total	$	743,995

125

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 15—EARNINGS PER SHARE

The following table shows the amounts used in computing our basic and diluted earnings per common share:



	For the Year Ended December 31,
	2016			2015		2014
	(In thousands, except per share amounts)
Numerator for basic and diluted earnings per share:
Income from continuing operations attributable to common stockholders	$	650,153		$	406,740	$	376,032
Discontinued operations	(922		)	11,103		99,735
Net income attributable to common stockholders	$	649,231		$	417,843	$	475,767
Denominator:
Denominator for basic earnings per share—weighted average shares	344,703			330,311		294,175
Effect of dilutive securities:
Stock options	569			360		495
Restricted stock awards	176			41		55
OP units	2,942			3,295		1,952
Denominator for diluted earnings per share—adjusted weighted average shares	348,390			334,007		296,677
Basic earnings per share:
Income from continuing operations attributable to common stockholders	$	1.88		$	1.23	$	1.28
Discontinued operations	0.00			0.03		0.34
Net income attributable to common stockholders	$	1.88		$	1.26	$	1.62
Diluted earnings per share:
Income from continuing operations attributable to common stockholders	$	1.86		$	1.22	$	1.26
Discontinued operations	0.00			0.03		0.34
Net income attributable to common stockholders	$	1.86		$	1.25	$	1.60

There were 1.4 million , 0.9 million and 0.5 million anti-dilutive options outstanding for the years ended December 31, 2016 , 2015 and 2014 , respectively.

NOTE 16—PERMANENT AND TEMPORARY EQUITY

Capital Stock

For the year ended December 31, 2016 , we issued and sold 18.9 million shares of common stock under our “at-the-market” (“ATM”) equity offering program and public offerings. Aggregate net proceeds for these activities were $1.3 billion , after sales agent commissions. We used the proceeds to fund a portion of the Life Sciences Acquisition, for working capital and other general corporate purposes. See NOTE 4—ACQUISITIONS OF REAL ESTATE PROPERTY for additional information. As of December 31, 2016 , approximately $230.6 million of our common stock remained available for sale under our ATM equity offering program.

In January 2015, in connection with the HCT acquisition, we issued approximately 28.4 million shares of our common stock and 1.1 million Class C Units that are redeemable for our common stock.

For the year ended December 31, 2015, we issued and sold a total of 7.2 million shares of our common stock under our ATM equity offering program for aggregate net proceeds of $491.6 million , after sales agent commissions.

For the year ended December 31, 2014 , we issued and sold a total of 3.4 million shares of common stock under the ATM program for aggregate net proceeds of $242.3 million , after sales agent commissions.

126

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Excess Share Provision

In order to preserve our ability to maintain REIT status, our Charter provides that if a person acquires beneficial ownership of more than 9% of our outstanding common stock or 9.9% of our outstanding preferred stock, the shares that are beneficially owned in excess of such limit are deemed to be excess shares. These shares are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by our Board of Directors. The trust is entitled to all dividends with respect to the shares and the trustee may exercise all voting power over the shares.

We have the right to buy the excess shares for a purchase price equal to the lesser of the price per share in the transaction that created the excess shares or the market price on the date we buy the shares, and we may defer payment of the purchase price for the excess shares for up to five years. If we do not purchase the excess shares, the trustee of the trust is required to transfer the excess shares at the direction of the Board of Directors. The owner of the excess shares is entitled to receive the lesser of the proceeds from the sale or the original purchase price for such excess shares, and any additional amounts are payable to the beneficiary of the trust. As of December 31, 2016 , there were no shares in the trust.

Our Board of Directors is empowered to grant waivers from the excess share provisions of our Charter.

Distribution Reinvestment and Stock Purchase Plan

Prior to its suspension in July 2014, our Distribution Reinvestment and Stock Purchase Plan (“DRIP”) enabled existing stockholders to purchase shares of common stock by reinvesting all or a portion of the cash distribution on their shares of our common stock, subject to certain limits. Existing stockholders and new investors also could purchase shares of our common stock under the DRIP by making optional cash payments, subject to certain limits. In 2014, we offered a 1% discount on the purchase price of our common stock to shareholders who reinvested their dividends or made optional cash purchases through the DRIP. We may determine whether or not to reinstate the DRIP at any time at our sole discretion, and if so, the amount and availability of this discount will be at our discretion. The granting of a discount for one month or quarter, as applicable, will not ensure the availability or amount of a discount in future periods, and each month or quarter, as applicable, we may lower or eliminate the discount without prior notice. In addition, we may change our determination as to whether common shares will be purchased by the plan administrator directly from us or in the open market without prior notice to investors.

Accumulated Other Comprehensive Income (Loss)

The following is a summary of our accumulated other comprehensive loss as of December 31, 2016 and 2015 :



	2016			2015
	(In thousands)
Foreign currency translation	$	(66,192	)	$	(13,926	)
Unrealized gain on marketable securities	1,239			1,549
Other	7,419			4,812
Total accumulated other comprehensive loss	$	(57,534	)	$	(7,565	)

The change in foreign currency translation during the year ended December 31, 2016 was due primarily to the remeasurement of our properties located in the United Kingdom.

127

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Redeemable OP Unitholder and Noncontrolling Interests

The following is a rollforward of our redeemable OP unitholder interest and noncontrolling interest for 2016 :



	Redeemable OP Unitholder Interest			Redeemable Noncontrolling Interest		Total Redeemable OP Unitholder and Noncontrolling Interests
	(In thousands)
Balance as of December 31, 2015	$	188,546		$	7,983	$	196,529
New issuances ⁽¹⁾	—			14,851		14,851
Change in valuation	21,085			717		21,802
Distributions and other	(8,640		)	—		(8,640		)
Redemptions	(23,814		)	—		(23,814		)
Balance as of December 31, 2016	$	177,177		$	23,551	$	200,728


⁽¹⁾	New issuances of redeemable noncontrolling interests relate to joint venture arrangements from the Life Sciences Acquisition.

NOTE 17—RELATED PARTY TRANSACTIONS

As disclosed in “ NOTE 3—CONCENTRATION OF CREDIT RISK ,” Atria provides comprehensive property management and accounting services with respect to our seniors housing communities that Atria operates, for which we pay annual management fees pursuant to long-term management agreements. Most of our management agreements with Atria have initial terms expiring either July 31, 2024, or December 31, 2027, with successive automatic ten -year renewal periods. The management fees payable to Atria under most of the Atria management agreements range from 4.5% to 5% of revenues generated by the applicable properties, and Atria can earn up to an additional 1% of revenues based on the achievement of specified performance targets. Atria also provides certain construction and development management services relating to various development and redevelopment projects within our seniors housing portfolio. For the years ended December 31, 2016 , 2015 and 2014 , we incurred fees to Atria of $58.7 million , $58.0 million , and $52.7 million respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income.

As disclosed in “ NOTE 4—ACQUISITIONS OF REAL ESTATE PROPERTY ,” we leased ten hospital campuses to Ardent pursuant to a single, triple-net master lease agreement. Pursuant to our master lease agreement, Ardent is obligated to pay base rent, which escalates annually by the lesser of four times the increase in the consumer price index for the relevant period and 2.5% . The initial term of the master lease expires on August 31, 2035 and Ardent has one ten -year renewal option. For the year ended December 31, 2016 and period from the closing of the Ardent Transaction through December 31, 2015, we recognized rental income from Ardent of $106.9 million and $42.9 million , respectively. In 2015, as part of the closing, we also paid certain transaction-related fees to Ardent of $40.0 million , which are recorded within merger-related expenses and deal costs in our Consolidated Statements of Income.

These transactions are considered to be arm’s length in nature and on terms consistent with transactions with unaffiliated third parties.

128

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 18—QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Summarized unaudited consolidated quarterly information for the years ended December 31, 2016 and 2015 is provided below.



	For the Year Ended December 31, 2016
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	(In thousands, except per share amounts)
Revenues	$	852,289		$	848,404		$	867,116		$	875,713
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	149,469		$	143,310		$	149,570		$	207,804
Discontinued operations	(489		)	(148		)	(118		)	(167		)
Net income attributable to common stockholders	$	148,980		$	143,162		$	149,452		$	207,637
Earnings per share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.44		$	0.42		$	0.43		$	0.59
Discontinued operations	0.00			0.00			0.00			0.00
Net income attributable to common stockholders	$	0.44		$	0.42		$	0.43		$	0.59
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.44		$	0.42		$	0.42		$	0.58
Discontinued operations	0.00			0.00			0.00			0.00
Net income attributable to common stockholders	$	0.44		$	0.42		$	0.42		$	0.58
Dividends declared per share	$	0.73		$	0.73		$	0.73		$	0.775



	For the Year Ended December 31, 2015
	First Quarter		Second Quarter		Third Quarter			Fourth Quarter
	(In thousands, except per share amounts)
Revenues	$	805,598	$	811,920	$	827,606		$	841,274
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	102,868	$	131,578	$	45,235		$	127,059
Discontinued operations	17,574		18,243		(22,383		)	(2,331		)
Net income attributable to common stockholders	$	120,442	$	149,821	$	22,852		$	124,728
Earnings per share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.32	$	0.39	$	0.14		$	0.38
Discontinued operations	0.05		0.06		(0.07		)	(0.01		)
Net income attributable to common stockholders	$	0.37	$	0.45	$	0.07		$	0.37
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.32	$	0.40	$	0.14		$	0.38
Discontinued operations	0.05		0.05		(0.07		)	(0.01		)
Net income attributable to common stockholders	$	0.37	$	0.45	$	0.07		$	0.37
Dividends declared per share	$	0.79	$	0.79	$	0.73		$	0.73

129

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 19—SEGMENT INFORMATION

As of December 31, 2016 , we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. Under our triple-net leased properties segment, we invest in and own seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease, and manage MOBs and life science and innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and investments, and miscellaneous accounts receivable.

Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to those segments in significant part, based on segment NOI and related measures. We define segment NOI as NOI adjusted for income or loss from unconsolidated entities, and we define NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. We consider segment NOI useful because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies between periods on a consistent basis. In order to facilitate a clear understanding of our historical consolidated operating results, segment NOI should be examined in conjunction with income from continuing operations as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense and other non-property specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

130

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summary information by reportable business segment is as follows:



	For the Year Ended December 31, 2016
	Triple-Net Leased Properties		Senior Living Operations		Office Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	845,834	$	—	$	630,342	$	—	$	1,476,176
Resident fees and services	—		1,847,306		—		—		1,847,306
Office building and other services revenue	4,921		—		13,029		3,120		21,070
Income from loans and investments	—		—		—		98,094		98,094
Interest and other income	—		—		—		876		876
Total revenues	$	850,755	$	1,847,306	$	643,371	$	102,090	$	3,443,522
Total revenues	$	850,755	$	1,847,306	$	643,371	$	102,090	$	3,443,522
Less:
Interest and other income	—		—		—		876		876
Property-level operating expenses	—		1,242,978		191,784		—		1,434,762
Office building services costs	—		—		7,311		—		7,311
Segment NOI	850,755		604,328		444,276		101,214		2,000,573
Income from unconsolidated entities	2,363		1,265		590		140		4,358
Segment profit	$	853,118	$	605,593	$	444,866	$	101,354	2,004,931
Interest and other income									876
Interest expense									(419,740		)
Depreciation and amortization									(898,924		)
General, administrative and professional fees									(126,875		)
Loss on extinguishment of debt, net									(2,779		)
Merger-related expenses and deal costs									(24,635		)
Other									(9,988		)
Income tax benefit									31,343
Income from continuing operations									$	554,209

131

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



	For the Year Ended December 31, 2015
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	779,801		$	—		$	566,245	$	—		$	1,346,046
Resident fees and services	—			1,811,255			—		—			1,811,255
Office building and other services revenue	4,433			—			34,436		2,623			41,492
Income from loans and investments	—			—			—		86,553			86,553
Interest and other income	—			—			—		1,052			1,052
Total revenues	$	784,234		$	1,811,255		$	600,681	$	90,228		$	3,286,398
Total revenues	$	784,234		$	1,811,255		$	600,681	$	90,228		$	3,286,398
Less:
Interest and other income	—			—			—		1,052			1,052
Property-level operating expenses	—			1,209,415			174,225		—			1,383,640
Office building services costs	—			—			26,565		—			26,565
Segment NOI	784,234			601,840			399,891		89,176			1,875,141
(Loss) income from unconsolidated entities	(813		)	(526		)	369		(450		)	(1,420		)
Segment profit	$	783,421		$	601,314		$	400,260	$	88,726		1,873,721
Interest and other income												1,052
Interest expense												(367,114		)
Depreciation and amortization												(894,057		)
General, administrative and professional fees												(128,035		)
Loss on extinguishment of debt, net												(14,411		)
Merger-related expenses and deal costs												(102,944		)
Other												(17,957		)
Income tax benefit												39,284
Income from continuing operations												$	389,539

132

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



	For the Year Ended December 31, 2014
	Triple-Net Leased Properties		Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	674,547	$	—		$	463,910	$	—		$	1,138,457
Resident fees and services	—		1,552,951			—		—			1,552,951
Office building and other services revenue	4,565		—			22,529		2,270			29,364
Income from loans and investments	—		—			—		51,778			51,778
Interest and other income	—		—			—		4,263			4,263
Total revenues	$	679,112	$	1,552,951		$	486,439	$	58,311		$	2,776,813
Total revenues	$	679,112	$	1,552,951		$	486,439	$	58,311		$	2,776,813
Less:
Interest and other income	—		—			—		4,263			4,263
Property-level operating expenses	—		1,036,556			158,832		—			1,195,388
Office building services costs	—		—			17,092		—			17,092
Segment NOI	679,112		516,395			310,515		54,048			1,560,070
Income (loss) from unconsolidated entities	859		(658		)	398		(738		)	(139		)
Segment profit	$	679,971	$	515,737		$	310,913	$	53,310		1,559,931
Interest and other income											4,263
Interest expense											(292,065		)
Depreciation and amortization											(725,216		)
General, administrative and professional fees											(121,738		)
Loss on extinguishment of debt, net											(5,564		)
Merger-related expenses and deal costs											(43,304		)
Other											(25,743		)
Income tax benefit											8,732
Income from continuing operations											$	359,296

Assets by reportable business segment are as follows:



	As of December 31,
	2016				2015
	(Dollars in thousands)
Assets:
Triple-net leased properties	$	7,627,792	32.9	%	$	7,996,645	35.9	%
Senior living operations	7,826,262		33.8		8,022,206		36.0
Office operations	6,614,454		28.6		5,209,751		23.4
All other assets	1,098,092		4.7		1,033,316		4.7
Total assets	$	23,166,600	100.0	%	$	22,261,918	100.0	%

133

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:



	For the Year Ended December 31,
	2016		2015		2014
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	74,192	$	1,890,245	$	647,870
Senior living operations	105,614		382,877		977,997
Office operations	1,503,304		604,827		36,861
Total capital expenditures	$	1,683,110	$	2,877,949	$	1,662,728

Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. Revenues are attributed to an individual country based on the location of each property.

Geographic information regarding our operations is as follows:



	For the Year Ended December 31,
	2016		2015		2014
	(In thousands)
Revenues:
United States	$	3,242,353	$	3,086,449	$	2,636,591
Canada	174,831		173,778		126,435
United Kingdom	26,338		26,171		13,787
Total revenues	$	3,443,522	$	3,286,398	$	2,776,813



	As of December 31,
	2016		2015
	(In thousands)
Net real estate property:
United States	$	19,105,939	$	18,271,829
Canada	1,037,105		1,039,561
United Kingdom	251,710		313,830
Total net real estate property	$	20,394,754	$	19,625,220

NOTE 20—CONDENSED CONSOLIDATING INFORMATION

Ventas, Inc. has fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100% owned subsidiary, Ventas Realty, including the senior notes that were jointly issued with Ventas Capital Corporation. Ventas Capital Corporation is a direct 100% owned subsidiary of Ventas Realty that has no assets or operations, but was formed in 2002 solely to facilitate offerings of senior notes by a limited partnership. None of our other subsidiaries (such subsidiaries, excluding Ventas Realty and Ventas Capital Corporation, the “Ventas Subsidiaries”) is obligated with respect to Ventas Realty’s outstanding senior notes. Certain of Ventas Realty’s outstanding senior notes reflected in our condensed consolidating information were issued jointly with Ventas Capital Corporation.

Ventas, Inc. has also fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100% owned subsidiary, Ventas Canada Finance Limited. None of our other subsidiaries is obligated with respect to Ventas Canada Finance Limited’s outstanding senior notes, all of which were issued on a private placement basis in Canada.

In connection with the NHP acquisition, our 100% owned subsidiary, NHP LLC, as successor to NHP, assumed the obligation to pay principal and interest with respect to the outstanding senior notes issued by NHP. Neither we nor any of our subsidiaries (other than NHP LLC) is obligated with respect to any of NHP LLC’s outstanding senior notes.

134

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following summarizes our condensed consolidating information as of December 31, 2016 and 2015 and for the years ended December 31, 2016 , 2015 , and 2014 :

CONDENSED CONSOLIDATING BALANCE SHEET



	As of December 31, 2016
	Ventas, Inc.		Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Assets
Net real estate investments	$	2,007	$	173,259		$	21,017,430		$	—		$	21,192,696
Cash and cash equivalents	210,303		—			76,404			—			286,707
Escrow deposits and restricted cash	198		1,504			78,945			—			80,647
Investment in and advances to affiliates	14,258,162		2,938,442			—			(17,196,604		)	—
Goodwill	—		—			1,033,225			—			1,033,225
Assets held for sale	—		—			54,961			—			54,961
Other assets	35,468		6,792			476,104			—			518,364
Total assets	$	14,506,138	$	3,119,997		$	22,737,069		$	(17,196,604	)	$	23,166,600
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	—	$	8,406,979		$	2,720,347		$	—		$	11,127,326
Intercompany loans	7,087,902		(6,209,707		)	(878,195		)	—			—
Accrued interest	—		65,403			18,359			—			83,762
Accounts payable and other liabilities	89,284		35,587			783,057			—			907,928
Liabilities held for sale	—		(1		)	1,463			—			1,462
Deferred income taxes	316,641		—			—			—			316,641
Total liabilities	7,493,827		2,298,261			2,645,031			—			12,437,119
Redeemable OP unitholder and noncontrolling interests	—		—			200,728			—			200,728
Total equity	7,012,311		821,736			19,891,310			(17,196,604		)	10,528,753
Total liabilities and equity	$	14,506,138	$	3,119,997		$	22,737,069		$	(17,196,604	)	$	23,166,600

135

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET



	As of December 31, 2015
	Ventas, Inc.		Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Assets
Net real estate investments	$	5,798	$	195,015		$	20,377,226		$	—		$	20,578,039
Cash and cash equivalents	11,733		—			41,290			—			53,023
Escrow deposits and restricted cash	7,154		1,644			69,098			—			77,896
Investment in and advances to affiliates	12,989,643		3,545,183			—			(16,534,826		)	—
Goodwill	—		—			1,047,497			—			1,047,497
Assets held for sale	—		4,488			88,572			—			93,060
Other assets	17,869		4,182			390,352			—			412,403
Total assets	$	13,032,197	$	3,750,512		$	22,014,035		$	(16,534,826	)	$	22,261,918
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	—	$	8,370,670		$	2,836,326		$	—		$	11,206,996
Intercompany loans	7,294,158		(6,571,512		)	(722,646		)	—			—
Accrued interest	—		64,561			16,303			—			80,864
Accounts payable and other liabilities	68,604		45,226			665,550			—			779,380
Liabilities held for sale	—		44			34,296			—			34,340
Deferred income taxes	338,382		—			—			—			338,382
Total liabilities	7,701,144		1,908,989			2,829,829			—			12,439,962
Redeemable OP unitholder and noncontrolling interests	—		—			196,529			—			196,529
Total equity	5,331,053		1,841,523			18,987,677			(16,534,826		)	9,625,427
Total liabilities and equity	$	13,032,197	$	3,750,512		$	22,014,035		$	(16,534,826	)	$	22,261,918

136

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF INCOME



	For the Year Ended December 31, 2016
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Revenues
Rental income	$	2,670		$	196,991		$	1,276,515		$	—		$	1,476,176
Resident fees and services	—			—			1,847,306			—			1,847,306
Office building and other services revenues	1,605			—			19,465			—			21,070
Income from loans and investments	341			—			97,753			—			98,094
Equity earnings in affiliates	500,515			—			(1,223		)	(499,292		)	—
Interest and other income	666			—			210			—			876
Total revenues	505,797			196,991			3,240,026			(499,292		)	3,443,522
Expenses
Interest	(46,650		)	281,458			184,932			—			419,740
Depreciation and amortization	8,968			18,297			871,659			—			898,924
Property-level operating expenses	—			317			1,434,445			—			1,434,762
Office building services costs	—			—			7,311			—			7,311
General, administrative and professional fees	509			18,320			108,046			—			126,875
Loss on extinguishment of debt, net	—			2,770			9			—			2,779
Merger-related expenses and deal costs	23,068			—			1,567			—			24,635
Other	(705		)	41			10,652			—			9,988
Total expenses	(14,810		)	321,203			2,618,621			—			2,925,014
Income (loss) before unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest	520,607			(124,212		)	621,405			(499,292		)	518,508
Income from unconsolidated entities	—			1,840			2,518			—			4,358
Income tax benefit	31,343			—			—			—			31,343
Income (loss) from continuing operations	551,950			(122,372		)	623,923			(499,292		)	554,209
Discontinued operations	(922		)	—			—			—			(922		)
Gain on real estate dispositions	98,203			—			—			—			98,203
Net income (loss)	649,231			(122,372		)	623,923			(499,292		)	651,490
Net income attributable to noncontrolling interest	—			—			2,259			—			2,259
Net income (loss) attributable to common stockholders	$	649,231		$	(122,372	)	$	621,664		$	(499,292	)	$	649,231

137

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF INCOME



	For the Year Ended December 31, 2015
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Revenues
Rental income	$	3,663		$	198,017		$	1,144,366		$	—		$	1,346,046
Resident fees and services	—			—			1,811,255			—			1,811,255
Office building and other services revenues	895			—			40,597			—			41,492
Income from loans and investments	8,605			534			77,414			—			86,553
Equity earnings in affiliates	458,213			—			(649		)	(457,564		)	—
Interest and other income	495			(6		)	563			—			1,052
Total revenues	471,871			198,545			3,073,546			(457,564		)	3,286,398
Expenses
Interest	(38,393		)	257,503			148,004			—			367,114
Depreciation and amortization	5,443			14,679			873,935			—			894,057
Property-level operating expenses	—			367			1,383,273			—			1,383,640
Office building services costs	—			—			26,565			—			26,565
General, administrative and professional fees	(321		)	20,777			107,579			—			128,035
Loss on extinguishment of debt, net	—			4,523			9,888			—			14,411
Merger-related expenses and deal costs	98,644			75			4,225			—			102,944
Other	(358		)	45			18,270			—			17,957
Total expenses	65,015			297,969			2,571,739			—			2,934,723
Income (loss) before unconsolidated entities, income taxes, discontinued operations and noncontrolling interest	406,856			(99,424		)	501,807			(457,564		)	351,675
Loss from unconsolidated entities	—			(183		)	(1,237		)	—			(1,420		)
Income tax benefit	39,284			—			—			—			39,284
Income (loss) from continuing operations	446,140			(99,607		)	500,570			(457,564		)	389,539
Discontinued operations	(46,877		)	34,748			23,232			—			11,103
Gain on real estate dispositions	18,580			—			—			—			18,580
Net income (loss)	417,843			(64,859		)	523,802			(457,564		)	419,222
Net income attributable to noncontrolling interest	—			—			1,379			—			1,379
Net income (loss) attributable to common stockholders	$	417,843		$	(64,859	)	$	522,423		$	(457,564	)	$	417,843

138

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF INCOME



	For the Year Ended December 31, 2014
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Revenues
Rental income	$	2,789		$	180,907		$	954,761		$	—		$	1,138,457
Resident fees and services	—			—			1,552,951			—			1,552,951
Office building and other services revenues	—			—			29,364			—			29,364
Income from loans and investments	3,052			—			48,726			—			51,778
Equity earnings in affiliates	480,267			—			199			(480,466		)	—
Interest and other income	3,314			26			923			—			4,263
Total revenues	489,422			180,933			2,586,924			(480,466		)	2,776,813
Expenses
Interest	(18,210		)	185,983			124,292			—			292,065
Depreciation and amortization	5,860			15,743			703,613			—			725,216
Property-level operating expenses	1			481			1,194,906			—			1,195,388
Office building services costs	—			—			17,092			—			17,092
General, administrative and professional fees	3,910			19,792			98,036			—			121,738
(Gain) loss on extinguishment of debt, net	(3		)	3			5,564			—			5,564
Merger-related expenses and deal costs	26,209			2,110			14,985			—			43,304
Other	9,732			—			16,011			—			25,743
Total expenses	27,499			224,112			2,174,499			—			2,426,110
Income (loss) before unconsolidated entities, income taxes, discontinued operations, and noncontrolling interest	461,923			(43,179		)	412,425			(480,466		)	350,703
Income (loss) from unconsolidated entities	—			1,250			(1,389		)	—			(139		)
Income tax benefit	8,732			—			—			—			8,732
Income (loss) from continuing operations	470,655			(41,929		)	411,036			(480,466		)	359,296
Discontinued operations	(12,858		)	61,755			50,838			—			99,735
Gain on real estate dispositions	17,970			—			—			—			17,970
Net income	475,767			19,826			461,874			(480,466		)	477,001
Net income attributable to noncontrolling interest	—			—			1,234			—			1,234
Net income attributable to common stockholders	$	475,767		$	19,826		$	460,640		$	(480,466	)	$	475,767

139

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME



	For the Year Ended December 31, 2016
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Net income (loss)	$	649,231		$	(122,372	)	$	623,923		$	(499,292	)	$	651,490
Other comprehensive loss:
Foreign currency translation	—			—			(52,266		)	—			(52,266		)
Change in unrealized gain on marketable debt securities	(310		)	—			—			—			(310		)
Other	—			—			2,607			—			2,607
Total other comprehensive loss	(310		)	—			(49,659		)	—			(49,969		)
Comprehensive income (loss)	648,921			(122,372		)	574,264			(499,292		)	601,521
Comprehensive income attributable to noncontrolling interest	—			—			2,259			—			2,259
Comprehensive income (loss) attributable to common stockholders	$	648,921		$	(122,372	)	$	572,005		$	(499,292	)	$	599,262



	For the Year Ended December 31, 2015
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Net income	$	417,843		$	(64,859	)	$	523,802		$	(457,564	)	$	419,222
Other comprehensive loss:
Foreign currency translation	—			—			(14,792		)	—			(14,792		)
Change in unrealized gain on marketable debt securities	(5,236		)	—			—			—			(5,236		)
Other	—			—			(658		)	—			(658		)
Total other comprehensive loss	(5,236		)	—			(15,450		)	—			(20,686		)
Comprehensive income (loss)	412,607			(64,859		)	508,352			(457,564		)	398,536
Comprehensive income attributable to noncontrolling interest	—			—			1,379			—			1,379
Comprehensive income (loss) attributable to common stockholders	$	412,607		$	(64,859	)	$	506,973		$	(457,564	)	$	397,157



	For the Year Ended December 31, 2014
	Ventas, Inc.		Ventas Realty		Ventas Subsidiaries			Consolidated Elimination			Consolidated
	(In thousands)
Net income	$	475,767	$	19,826	$	461,874		$	(480,466	)	$	477,001
Other comprehensive income (loss):
Foreign currency translation	—		—		(17,153		)	—			(17,153		)
Change in unrealized gain on marketable debt securities	7,001		—		—			—			7,001
Other	—		—		3,614			—			3,614
Total other comprehensive income (loss)	7,001		—		(13,539		)	—			(6,538		)
Comprehensive income	482,768		19,826		448,335			(480,466		)	470,463
Comprehensive income attributable to noncontrolling interest	—		—		1,234			—			1,234
Comprehensive income attributable to common stockholders	$	482,768	$	19,826	$	447,101		$	(480,466	)	$	469,229

140

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Year Ended December 31, 2016
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination		Consolidated
	(In thousands)
Net cash provided by (used in) operating activities	$	65,121		$	(93,432	)	$	1,395,768		$	—	$	1,367,457
Cash flows from investing activities:
Net investment in real estate property	(1,448,230		)	—			19,118			—		$	(1,429,112	)
Investment in loans receivable and other	—			—			(158,635		)			$	(158,635	)
Proceeds from real estate disposals	257,441			—			43,120			—		$	300,561
Proceeds from loans receivable	—			—			320,082			—		$	320,082
Development project expenditures	—			—			(143,647		)	—		$	(143,647	)
Capital expenditures	—			(314		)	(117,142		)	—		$	(117,456	)
Other	—			—			(6,436		)	—		(6,436		)
Net cash used in investing activities	(1,190,789		)	(314		)	(43,540		)	—		(1,234,643		)
Cash flows from financing activities:
Net change in borrowings under credit facilities	—			(171,000		)	135,363			—		(35,637		)
Proceeds from debt	—			846,521			46,697			—		893,218
Repayment of debt	—			(651,820		)	(370,293		)	—		(1,022,113		)
Net change in intercompany debt	990,056			82,266			(1,072,322		)	—		—
Purchase of noncontrolling interest	—			—			(2,846		)	—		(2,846		)
Payment of deferred financing costs	—			(5,787		)	(768		)	—		(6,555		)
Issuance of common stock, net	1,286,680			—			—			—		1,286,680
Cash distribution from (to) affiliates	106,723			(6,434		)	(100,289		)	—		—
Cash distribution to common stockholders	(1,024,968		)	—			—			—		(1,024,968		)
Cash distribution to redeemable OP unitholders	—			—			(8,640		)	—		(8,640		)
Contributions from noncontrolling interest	—			—			7,326			—		7,326
Distributions to noncontrolling interest	—			—			(6,879		)	—		(6,879		)
Other	22,136			—			—			—		22,136
Net cash provided by (used in) financing activities	1,380,627			93,746			(1,372,651		)	—		101,722
Net increase (decrease) in cash and cash equivalents	254,959			—			(20,423		)	—		234,536
Effect of foreign currency translation on cash and cash equivalents	(56,389		)	—			55,537			—		(852		)
Cash and cash equivalents at beginning of period	11,733			—			41,290			—		53,023
Cash and cash equivalents at end of period	$	210,303		$	—		$	76,404		$	—	$	286,707

141

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Year Ended December 31, 2015
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination		Consolidated
	(In thousands)
Net cash (used in) provided by operating activities	$	(123,041	)	$	16,528		$	1,498,280		$	—	$	1,391,767
Cash flows from investing activities:
Net investment in real estate property	(2,650,788		)	—			—			—		(2,650,788		)
Investment in loans receivable and other	—			—			(171,144		)	—		(171,144		)
Proceeds from real estate disposals	492,408			—			—			—		492,408
Proceeds from loans receivable	—			—			109,176			—		109,176
Proceeds from sale or maturity of marketable securities	76,800			—			—			—		76,800
Funds held in escrow for future development expenditures	—			—			4,003			—		4,003
Development project expenditures	—			—			(119,674		)	—		(119,674		)
Capital expenditures	—			(15,733		)	(91,754		)	—		(107,487		)
Investment in unconsolidated operating entity	(26,282		)	—			—			—		(26,282		)
Contributions to unconsolidated entities	—			—			(30,704		)	—		(30,704		)
Net cash used in investing activities	(2,107,862		)	(15,733		)	(300,097		)	—		(2,423,692		)
Cash flows from financing activities:
Net change in borrowings under revolving credit facility	—			(584,000		)	(139,457		)	—		(723,457		)
Net cash impact of CCP spin-off	1,273,000			—			(1,401,749		)	—		(128,749		)
Proceeds from debt	—			2,292,568			220,179			—		2,512,747
Issuance of debt related to CCP spin-off	—			—			1,400,000					1,400,000
Repayment of debt	—			(705,000		)	(730,596		)	—		(1,435,596		)
Net change in intercompany debt	1,782,954			(1,008,773		)	(774,181		)	—		—
Purchase of noncontrolling interest	—			—			(3,819		)	—		(3,819		)
Payment of deferred financing costs	—			(22,297		)	(2,368		)	—		(24,665		)
Issuance of common stock, net	491,023			—			—			—		491,023
Cash distribution (to) from affiliates	(315,466		)	26,707			288,759			—		—
Cash distribution to common stockholders	(1,003,413		)	—			—			—		(1,003,413		)
Cash distribution to redeemable OP unitholders	—			—			(15,095		)	—		(15,095		)
Purchases of redeemable OP units	—			—			(33,188		)	—		(33,188		)
Distributions to noncontrolling interest	—			—			(12,649		)	—		(12,649		)
Other	6,983			—			—			—		6,983
Net cash provided by (used in) financing activities	2,235,081			(795		)	(1,204,164		)	—		1,030,122
Net increase (decrease) in cash and cash equivalents	4,178			—			(5,981		)	—		(1,803		)
Effect of foreign currency translation on cash and cash equivalents	(17,302		)	—			16,780			—		(522		)
Cash and cash equivalents at beginning of period	24,857			—			30,491			—		55,348
Cash and cash equivalents at end of period	$	11,733		$	—		$	41,290		$	—	$	53,023

142

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Year Ended December 31, 2014
	Ventas, Inc.			Ventas Realty			Ventas Subsidiaries			Consolidated Elimination		Consolidated
	(In thousands)
Net cash (used in) provided by operating activities	$	(95,331	)	$	80,263		$	1,269,913		$	—	$	1,254,845
Cash flows from investing activities:
Net investment in real estate property	(1,468,286		)	—			—			—		(1,468,286		)
Investment in loans receivable and other	—			—			(498,992		)	—		(498,992		)
Proceeds from real estate disposals	118,246			—			—			—		118,246
Proceeds from loans receivable	—			—			73,557			—		73,557
Purchase of marketable securities	—			—			(96,689		)	—		(96,689		)
Proceeds from sale or maturity of marketable securities	—			—			21,689			—		21,689
Funds held in escrow for future development expenditures	—			—			4,590			—		4,590
Development project expenditures	—			—			(106,988		)	—		(106,988		)
Capital expenditures	—			(7,749		)	(79,705		)	—		(87,454		)
Contributions to unconsolidated entities	(5,527		)	—			(71		)	—		(5,598		)
Other	(2,689		)	—			(6,426		)	—		(9,115		)
Net cash used in investing activities	(1,358,256		)	(7,749		)	(689,035		)	—		(2,055,040		)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	—			386,000			154,203			—		540,203
Proceeds from debt	—			696,661			1,311,046			—		2,007,707
Repayment of debt	—			—			(1,151,395		)	—		(1,151,395		)
Net change in intercompany debt	1,300,790			(895,961		)	(404,829		)	—		—
Payment of deferred financing costs	—			(6,608		)	(7,612		)	—		(14,220		)
Issuance of common stock, net	242,107			—			—			—		242,107
Cash distribution from (to) affiliates	776,497			(252,611		)	(523,886		)	—		—
Cash distribution to common stockholders	(875,614		)	—			—			—		(875,614		)
Cash distribution to redeemable OP unitholders	(5,762		)	—			—			—		(5,762		)
Purchases of redeemable OP units	(503		)	—			—			—		(503		)
Contributions from noncontrolling interest	—			—			491			—		491
Distributions to noncontrolling interest	—			—			(9,559		)	—		(9,559		)
Other	24,597			5			—			—		24,602
Net cash provided by (used in) financing activities	1,462,112			(72,514		)	(631,541		)	—		758,057
Net increase (decrease) in cash and cash equivalents	8,525			—			(50,663		)	—		(42,138		)
Effect of foreign currency translation on cash and cash equivalents	(11,837		)	—			14,507			—		2,670
Cash and cash equivalents at beginning of period	28,169			—			66,647			—		94,816
Cash and cash equivalents at end of period	$	24,857		$	—		$	30,491		$	—	$	55,348

143

VENTAS, INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS



Allowance Accounts		Additions		Deductions
	(In Thousands)
Year Ended December 31,	Balance at Beginning of Year	Charged to Earnings	Acquired Properties	Uncollectible Accounts Written-off		Disposed Properties		Balance at End of Year

2016
Allowance for doubtful accounts	13,546	5,093	—	(7,111	)	108		$	11,636
Straight-line rent receivable allowance	101,418	9,682	—	—		(1,264	)	$	109,836
	114,964	14,775	—	(7,111	)	(1,156	)	121,472

2015
Allowance for doubtful accounts	11,460	10,937	753	(12,977	)	3,373		$	13,546
Straight-line rent receivable allowance	83,461	35,448	—	—		(17,491	)	$	101,418
	94,921	46,385	753	(12,977	)	(14,118	)	114,964

2014
Allowance for doubtful accounts	9,624	8,204	—	(4,272	)	(2,096	)	$	11,460
Straight-line rent receivable allowance	60,787	46,503	—	462		(24,291	)	$	83,461
	70,411	54,707	—	(3,810	)	(26,387	)	94,921

144

VENTAS, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION



	For the Years Ended December 31,
	2016			2015			2014
	(In thousands)
Reconciliation of real estate:
Carrying cost:
Balance at beginning of period	$	22,458,032		$	19,241,735		$	20,393,411
Additions during period:
Acquisitions	1,380,044			4,063,355			1,769,790
Capital expenditures	270,664			229,560			189,711
Deductions during period:
Foreign currency translation	(6,252		)	(209,460		)	(87,776		)
Other ⁽¹⁾	(285,902		)	(867,158		)	(3,023,401		)
Balance at end of period	$	23,816,586		$	22,458,032		$	19,241,735

Accumulated depreciation:
Balance at beginning of period	$	3,544,625		$	2,925,508		$	2,881,950
Additions during period:
Depreciation expense	732,309			778,419			725,485
Dispositions:
Sales and/or transfers to assets held for sale	(87,431		)	(144,545		)	(675,846		)
Foreign currency translation	993			(14,757		)	(6,081		)
Balance at end of period	$	4,190,496		$	3,544,625		$	2,925,508


⁽¹⁾	Other may include sales, transfers to assets held for sale and impairments.

145

VENTAS, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2016

(Dollars in thousands)



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
KINDRED SKILLED NURSING FACILITIES
Canyonwood Nursing and Rehab Center	Redding	CA	—	401	3,784	—		401	3,784	4,185	2,381	1,804	1989	1989	45 years
The Tunnell Center for Rehabilitation & Heathcare	San Francisco	CA	—	1,902	7,531	—		1,902	7,531	9,433	6,320	3,113	1967	1993	28 years
Lawton Healthcare Center	San Francisco	CA	—	943	514	—		943	514	1,457	525	932	1962	1996	20 years
Valley Gardens Health Care & Rehabilitation Center	Stockton	CA	—	516	3,405	—		516	3,405	3,921	2,207	1,714	1988	1988	29 years
Aurora Care Center	Aurora	CO	—	197	2,328	—		197	2,328	2,525	1,894	631	1962	1995	30 years
Lafayette Nursing and Rehab Center	Fayetteville	GA	—	598	6,623	—		598	6,623	7,221	6,622	599	1989	1995	20 years
Canyon West Health and Rehabilitation Center	Caldwell	ID	—	312	2,050	—		312	2,050	2,362	1,055	1,307	1974	1998	45 years
Mountain Valley Care & Rehabilitation Center	Kellogg	ID	—	68	1,280	—		68	1,280	1,348	1,316	32	1971	1984	25 years
Lewiston Rehabilitation & Care Center	Lewiston	ID	—	133	3,982	—		133	3,982	4,115	3,695	420	1964	1984	29 years
Aspen Park Healthcare	Moscow	ID	—	261	2,571	—		261	2,571	2,832	2,580	252	1955	1990	25 years
Nampa Care Center	Nampa	ID	—	252	2,810	—		252	2,810	3,062	2,722	340	1950	1983	25 years
Weiser Rehabilitation & Care Center	Weiser	ID	—	157	1,760	—		157	1,760	1,917	1,827	90	1963	1983	25 years
Wedgewood Healthcare Center	Clarksville	IN	—	119	5,115	—		119	5,115	5,234	3,841	1,393	1985	1995	35 years
Columbus Health and Rehabilitation Center	Columbus	IN	—	345	6,817	—		345	6,817	7,162	6,861	301	1966	1991	25 years
Harrison Health and Rehabilitation Centre	Corydon	IN	—	125	6,068	—		125	6,068	6,193	2,588	3,605	1998	1998	45 years
Valley View Health Care Center	Elkhart	IN	—	87	2,665	—		87	2,665	2,752	2,538	214	1985	1993	25 years
Wildwood Health Care Center	Indianapolis	IN	—	134	4,983	—		134	4,983	5,117	4,724	393	1988	1993	25 years
Windsor Estates Health & Rehab Center	Kokomo	IN	—	256	6,625	—		256	6,625	6,881	4,811	2,070	1962	1995	35 years
Rolling Hills Health Care Center	New Albany	IN	—	81	1,894	—		81	1,894	1,975	1,807	168	1984	1993	25 years
Southwood Health & Rehabilitation Center	Terre Haute	IN	—	90	2,868	(8	)	82	2,868	2,950	2,733	217	1988	1993	25 years

146



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Maple Manor Health Care Center	Greenville	KY	—	59	3,187	—		59	3,187	3,246	2,834	412	1968	1990	30 years
Eagle Pond Rehabilitation and Living Center	South Dennis	MA	—	296	6,896	—		296	6,896	7,192	4,264	2,928	1985	1987	50 years
Harrington House Nursing and Rehabilitation Center	Walpole	MA	—	4	4,444	—		4	4,444	4,448	2,581	1,867	1991	1991	45 years
Parkview Acres Care and Rehabilitation Center	Dillon	MT	—	207	2,578	—		207	2,578	2,785	2,143	642	1965	1993	29 years
Park Place Health Care Center	Great Falls	MT	—	600	6,311	—		600	6,311	6,911	5,240	1,671	1963	1993	28 years
Rose Manor Healthcare Center	Nashua	NH	—	200	3,527	—		200	3,527	3,727	3,429	298	1972	1991	26 years
Guardian Care of Elizabeth City	Durham	NC	—	71	561	—		71	561	632	632	—	1977	1982	20 years
Guardian Care of Henderson	Elizabeth City	NC	—	206	1,997	—		206	1,997	2,203	1,650	553	1957	1993	29 years
Greenbriar Terrace Healthcare	Henderson	NC	—	776	6,011	—		776	6,011	6,787	5,796	991	1963	1990	25 years
Nansemond Pointe Rehabilitation and Healthcare Center	Burlington	VT	—	534	6,990	—		534	6,990	7,524	5,570	1,954	1963	1991	32 years
River Pointe Rehabilitation and Healthcare Center	Suffolk	VA	—	770	4,440	—		770	4,440	5,210	4,507	703	1953	1991	25 years
Bay Pointe Medical and Rehabilitation Center	Virginia Beach	VA	—	805	2,886	(380	)	425	2,886	3,311	2,325	986	1971	1993	29 years
Birchwood Terrace Healthcare	Virginia Beach	VA	—	15	4,656	—		15	4,656	4,671	4,671	—	1965	1990	27 years
Arden Rehabilitation and Healthcare Center	Seattle	WA	—	1,111	4,013	—		1,111	4,013	5,124	3,323	1,801	1950	1993	28.5 years
Lakewood Healthcare Center	Tacoma	WA	—	504	3,511	—		504	3,511	4,015	2,473	1,542	1989	1989	45 years
Vancouver Health & Rehabilitation Center	Vancouver	WA	—	449	2,964	—		449	2,964	3,413	2,519	894	1970	1993	28 years
TOTAL KINDRED SKILLED NURSING FACILITIES			—	13,584	140,645	(388	)	13,196	140,645	153,841	117,004	36,837
NON-KINDRED SKILLED NURSING FACILITIES
Cherry Hills Health Care Center	Englewood	CO	—	241	2,180	194		241	2,374	2,615	1,922	693	1960	1995	30 years
Brookdale Lisle SNF	Lisle	IL	—	730	9,270	—		730	9,270	10,000	2,618	7,382	1990	2009	35 years
Lopatcong Center	Phillipsburg	NJ	—	1,490	12,336	—		1,490	12,336	13,826	5,639	8,187	1982	2004	30 years
Marietta Convalescent Center	Marietta	OH	—	158	3,266	75		158	3,341	3,499	3,207	292	1972	1993	25 years
The Belvedere	Chester	PA	—	822	7,203	—		822	7,203	8,025	3,282	4,743	1899	2004	30 years
Pennsburg Manor	Pennsburg	PA	—	1,091	7,871	—		1,091	7,871	8,962	3,641	5,321	1982	2004	30 years
Chapel Manor	Philadelphia	PA	—	1,595	13,982	1,358		1,595	15,340	16,935	7,190	9,745	1948	2004	30 years
Wayne Center	Strafford	PA	—	662	6,872	850		662	7,722	8,384	3,821	4,563	1897	2004	30 years

147



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Everett Rehabilitation & Care	Everett	WA	—	2,750	27,337	—	2,750	27,337	30,087	4,655	25,432	1995	2011	35 years
Northwest Continuum Care Center	Longview	WA	—	145	2,563	171	145	2,734	2,879	2,262	617	1955	1992	29 years
SunRise Care & Rehab Moses Lake	Moses Lake	WA	—	660	17,439	—	660	17,439	18,099	3,059	15,040	1972	2011	35 years
SunRise Care & Rehab Lake Ridge	Moses Lake	WA	—	660	8,866	—	660	8,866	9,526	1,625	7,901	1988	2011	35 years
Rainier Vista Care Center	Puyallup	WA	—	520	4,780	305	520	5,085	5,605	3,177	2,428	1986	1991	40 years
Logan Center	Logan	WV	—	300	12,959	—	300	12,959	13,259	2,224	11,035	1987	2011	35 years
Ravenswood Healthcare Center	Ravenswood	WV	—	320	12,710	—	320	12,710	13,030	2,187	10,843	1987	2011	35 years
Valley Center	South Charleston	WV	—	750	24,115	—	750	24,115	24,865	4,194	20,671	1987	2011	35 years
White Sulphur	White Sulphur Springs	WV	—	250	13,055	—	250	13,055	13,305	2,261	11,044	1987	2011	35 years
TOTAL NON-KINDRED SKILLED NURSING FACILITIES			—	13,144	186,804	2,953	13,144	189,757	202,901	56,964	145,937
TOTAL FOR SKILLED NURSING FACILITIES			—	26,728	327,449	2,565	26,340	330,402	356,742	173,968	182,774
SPECIALTY HOSPITALS
Southern Arizona Rehab	Tucson	AZ	—	770	25,589	—	770	25,589	26,359	4,186	22,173	1992	2011	35 years
Kindred Hospital - Brea	Brea	CA	—	3,144	2,611	—	3,144	2,611	5,755	1,397	4,358	1990	1995	40 years
Kindred Hospital - Ontario	Ontario	CA	—	523	2,988	—	523	2,988	3,511	2,975	536	1950	1994	25 years
Kindred Hospital - San Diego	San Diego	CA	—	670	11,764	—	670	11,764	12,434	11,564	870	1965	1994	25 years
Kindred Hospital - San Francisco Bay Area	San Leandro	CA	—	2,735	5,870	—	2,735	5,870	8,605	6,119	2,486	1962	1993	25 years
HealthSouth Rehabilitation Hospital	Tustin	CA	—	2,810	25,248	—	2,810	25,248	28,058	4,209	23,849	1991	2011	35 years
Kindred Hospital - Westminster	Westminster	CA	—	727	7,384	—	727	7,384	8,111	7,561	550	1973	1993	20 years
Kindred Hospital - Denver	Denver	CO	—	896	6,367	—	896	6,367	7,263	6,711	552	1963	1994	20 years
Kindred Hospital - South Florida - Coral Gables	Coral Gables	FL	—	1,071	5,348	—	1,071	5,348	6,419	4,915	1,504	1956	1992	30 years
Kindred Hospital - South Florida Ft. Lauderdale	Fort Lauderdale	FL	—	1,758	14,080	—	1,758	14,080	15,838	13,826	2,012	1969	1989	30 years
Kindred Hospital - North Florida	Green Cove Springs	FL	—	145	4,613	—	145	4,613	4,758	4,517	241	1956	1994	20 years
Kindred Hospital - South Florida - Hollywood	Hollywood	FL	—	605	5,229	—	605	5,229	5,834	5,234	600	1937	1995	20 years
Kindred Hospital - Bay Area St. Petersburg	St. Petersburg	FL	—	1,401	16,706	—	1,401	16,706	18,107	14,593	3,514	1968	1997	40 years
Kindred Hospital - Central Tampa	Tampa	FL	—	2,732	7,676	—	2,732	7,676	10,408	5,117	5,291	1970	1993	40 years

148



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Kindred Hospital - Chicago (North Campus)	Chicago	IL	—	1,583	19,980	—	1,583	19,980	21,563	19,499	2,064	1949	1995	25 years
Kindred - Chicago - Lakeshore	Chicago	IL	—	1,513	9,525	—	1,513	9,525	11,038	9,465	1,573	1995	1976	20 years
Kindred Hospital - Chicago (Northlake Campus)	Northlake	IL	—	850	6,498	—	850	6,498	7,348	6,020	1,328	1960	1991	30 years
Kindred Hospital - Sycamore	Sycamore	IL	—	77	8,549	—	77	8,549	8,626	8,245	381	1949	1993	20 years
Kindred Hospital - Indianapolis	Indianapolis	IN	—	985	3,801	—	985	3,801	4,786	3,461	1,325	1955	1993	30 years
Kindred Hospital - Louisville	Louisville	KY	—	3,041	12,279	—	3,041	12,279	15,320	12,475	2,845	1964	1995	20 years
Kindred Hospital - Kansas City	Kansas City	MO	—	277	2,914	—	277	2,914	3,191	2,712	479	1958	1992	30 years
Kindred Hospital - St. Louis	St. Louis	MO	—	1,126	2,087	—	1,126	2,087	3,213	1,911	1,302	1984	1991	40 years
Kindred Hospital - Greensboro	Greensboro	NC	—	1,010	7,586	—	1,010	7,586	8,596	7,649	947	1964	1994	20 years
Lovelace Rehabilitation Hospital	Albuquerque	NM	—	401	17,186	1,342	401	18,528	18,929	747	18,182	1989	2015	36 years
Kindred Hospital - Albuquerque	Albuquerque	NM	—	11	4,253	—	11	4,253	4,264	2,879	1,385	1985	1993	40 years
Kindred Hospital - Las Vegas (Sahara)	Las Vegas	NV	—	1,110	2,177	—	1,110	2,177	3,287	1,400	1,887	1980	1994	40 years
University Hospitals Rehabilitation Hospital	Beachwood	OH	—	1,800	16,444	—	1,800	16,444	18,244	1,767	16,477	2013	2013	35 years
Kindred Hospital - Philadelphia	Philadelphia	PA	—	135	5,223	—	135	5,223	5,358	3,367	1,991	1960	1995	35 years
Kindred Hospital - Chattanooga	Chattanooga	TN	—	756	4,415	—	756	4,415	5,171	4,118	1,053	1975	1993	22 years
Kindred Hospital - Tarrant County (Fort Worth Southwest)	Fort Worth	TX	—	2,342	7,458	—	2,342	7,458	9,800	7,504	2,296	1987	1986	20 years
Kindred Hospital (Houston Northwest)	Houston	TX	—	1,699	6,788	—	1,699	6,788	8,487	5,627	2,860	1986	1985	40 years
Kindred Hospital - Houston	Houston	TX	—	33	7,062	—	33	7,062	7,095	6,637	458	1972	1994	20 years
Kindred Hospital - Mansfield	Mansfield	TX	—	267	2,462	—	267	2,462	2,729	1,960	769	1983	1990	40 years
Kindred Hospital - San Antonio	San Antonio	TX	—	249	11,413	—	249	11,413	11,662	9,179	2,483	1981	1993	30 years
Reliant Rehabilitation - Dallas TX	Dallas	TX	—	2,318	38,702	—	2,318	38,702	41,020	2,360	38,660	2009	2015	35 years
Baylor Institute for Rehabilition - Ft. Worth TX	Fort Worth	TX	—	2,071	16,018	—	2,071	16,018	18,089	1,060	17,029	2008	2015	35 years
Reliant Rehabilitation - Houston TX	Houston	TX	—	1,838	34,832	—	1,838	34,832	36,670	2,228	34,442	2012	2015	35 years
Select Rehabilitation - San Antonio TX	San Antonio	TX	—	1,859	18,301	—	1,859	18,301	20,160	1,187	18,973	2010	2015	35 years
TOTAL FOR SPECIALTY HOSPITALS			—	47,338	407,426	1,342	47,338	408,768	456,106	216,381	239,725

149



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
GENERAL ACUTE CARE HOSPITALS
Lovelace Medical Center Downtown	Albuquerque	NM	—	9,840	156,535	7,680		9,928	164,127	174,055	7,104	166,951	1968	2015	33.5 years
Lovelace Westside Hospital	Albuquerque	NM	—	10,107	18,501	(4,407	)	10,107	14,094	24,201	1,653	22,548	1984	2015	20.5 years
Lovelace Women's Hospital	Albuquerque	NM	—	7,236	183,866	9,154		7,236	193,020	200,256	6,090	194,166	1983	2015	47 years
Roswell Regional Hospital	Roswell	NM	—	2,560	41,164	287		2,560	41,451	44,011	1,377	42,634	2007	2015	47 years
Hillcrest Hospital Claremore	Claremore	OK	—	3,623	34,359	(10,447	)	3,623	23,912	27,535	1,003	26,532	1955	2015	40 years
Bailey Medical Center	Owasso	OK	—	4,964	8,969	(1,866	)	4,964	7,103	12,067	466	11,601	2006	2015	32.5 years
Hillcrest Medical Center	Tulsa	OK	—	28,319	215,199	4,140		28,319	219,339	247,658	9,397	238,261	1928	2015	34 years
Hillcrest Hospital South	Tulsa	OK	—	17,026	100,892	11,849		17,026	112,741	129,767	4,467	125,300	1999	2015	40 years
Baptist St. Anthony's Hospital	Amarillo	TX	—	13,779	358,029	6,001		13,015	364,794	377,809	12,105	365,704	1967	2015	44.5 years
Spire Hull and East Riding Hospital	Anlaby	Hull	—	3,194	81,613	(17,625	)	2,530	64,652	67,182	3,632	63,550	2010	2014	50 years
Spire Fylde Coast Hospital	Blackpool	Lancashire	—	2,446	28,896	(6,513	)	1,938	22,891	24,829	1,305	23,524	1980	2014	50 years
Spire Clare Park Hospital	Farnham	Surrey	—	6,263	26,119	(6,730	)	4,961	20,691	25,652	1,226	24,426	2009	2014	50 years
TOTAL FOR GENERAL ACUTE CARE HOSPITALS			—	109,357	1,254,142	(8,477	)	106,207	1,248,815	1,355,022	49,825	1,305,197
TOTAL FOR HOSPITALS			—	156,695	1,661,568	(7,135	)	153,545	1,657,583	1,811,128	266,206	1,544,922
BROOKDALE SENIORS HOUSING COMMUNITIES
Sterling House of Chandler	Chandler	AZ	—	2,000	6,538	—		2,000	6,538	8,538	1,219	7,319	1998	2011	35 years
The Springs of East Mesa	Mesa	AZ	—	2,747	24,918	—		2,747	24,918	27,665	10,163	17,502	1986	2005	35 years
Sterling House of Mesa	Mesa	AZ	—	655	6,998	—		655	6,998	7,653	2,831	4,822	1998	2005	35 years
Clare Bridge of Oro Valley	Oro Valley	AZ	—	666	6,169	—		666	6,169	6,835	2,496	4,339	1998	2005	35 years
Sterling House of Peoria	Peoria	AZ	—	598	4,872	—		598	4,872	5,470	1,971	3,499	1998	2005	35 years
Clare Bridge of Tempe	Tempe	AZ	—	611	4,066	—		611	4,066	4,677	1,645	3,032	1997	2005	35 years
Sterling House on East Speedway	Tucson	AZ	—	506	4,745	—		506	4,745	5,251	1,920	3,331	1998	2005	35 years
Emeritus at Fairwood Manor	Anaheim	CA	—	2,464	7,908	—		2,464	7,908	10,372	2,932	7,440	1977	2005	35 years
Woodside Terrace	Redwood City	CA	—	7,669	66,691	—		7,669	66,691	74,360	27,420	46,940	1988	2005	35 years
The Atrium	San Jose	CA	—	6,240	66,329	12,838		6,240	79,167	85,407	27,256	58,151	1987	2005	35 years
Brookdale Place	San Marcos	CA	—	4,288	36,204	—		4,288	36,204	40,492	14,972	25,520	1987	2005	35 years
Emeritus at Heritage Place	Tracy	CA	—	1,110	13,296	—		1,110	13,296	14,406	4,604	9,802	1986	2005	35 years
Ridge Point Assisted Living Inn	Boulder	CO	—	1,290	20,683	—		1,290	20,683	21,973	3,597	18,376	1985	2011	35 years
Wynwood of Colorado Springs	Colorado Springs	CO	—	715	9,279	—		715	9,279	9,994	3,754	6,240	1997	2005	35 years
Wynwood of Pueblo	Pueblo	CO	4,859	840	9,403	—		840	9,403	10,243	3,804	6,439	1997	2005	35 years
The Gables at Farmington	Farmington	CT	—	3,995	36,310	—		3,995	36,310	40,305	14,803	25,502	1984	2005	35 years

150



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Emeritus at South Windsor	South Windsor	CT	—	2,187	12,682	—		2,187	12,682	14,869	4,648	10,221	1999	2004	35 years
Chatfield	West Hartford	CT	—	2,493	22,833	21,919		2,493	44,752	47,245	9,480	37,765	1989	2005	35 years
Sterling House of Salina II	Bonita Springs	FL	8,753	1,540	10,783	—		1,540	10,783	12,323	4,305	8,018	1989	2005	35 years
Emeritus at Boynton Beach	Boynton Beach	FL	13,414	2,317	16,218	—		2,317	16,218	18,535	6,311	12,224	1999	2005	35 years
Emeritus at Deer Creek	Deerfield Beach	FL	—	1,399	9,791	—		1,399	9,791	11,190	4,129	7,061	1999	2005	35 years
Clare Bridge of Ft. Myers	Fort Myers	FL	—	1,510	7,862	—		1,510	7,862	9,372	1,358	8,014	1996	2011	35 years
Sterling House of Merrimac	Jacksonville	FL	—	860	16,745	—		860	16,745	17,605	2,779	14,826	1997	2011	35 years
Clare Bridge of Jacksonville	Jacksonville	FL	—	1,300	9,659	—		1,300	9,659	10,959	1,646	9,313	1997	2011	35 years
Emeritus at Jensen Beach	Jensen Beach	FL	12,037	1,831	12,820	—		1,831	12,820	14,651	5,104	9,547	1999	2005	35 years
Sterling House of Ormond Beach	Ormond Beach	FL	—	1,660	9,738	—		1,660	9,738	11,398	1,672	9,726	1997	2011	35 years
Sterling House of Palm Coast	Palm Coast	FL	—	470	9,187	—		470	9,187	9,657	1,591	8,066	1997	2011	35 years
Sterling House of Pensacola	Pensacola	FL	—	633	6,087	—		633	6,087	6,720	2,462	4,258	1998	2005	35 years
Sterling House of Englewood (FL)	Rotonda West	FL	—	1,740	4,331	—		1,740	4,331	6,071	900	5,171	1997	2011	35 years
Clare Bridge of Tallahassee	Tallahassee	FL	4,314	667	6,168	—		667	6,168	6,835	2,495	4,340	1998	2005	35 years
Sterling House of Tavares	Tavares	FL	—	280	15,980	—		280	15,980	16,260	2,664	13,596	1997	2011	35 years
Clare Bridge of West Melbourne	West Melbourne	FL	6,149	586	5,481	—		586	5,481	6,067	2,217	3,850	2000	2005	35 years
The Classic at West Palm Beach	West Palm Beach	FL	24,828	3,758	33,072	—		3,758	33,072	36,830	13,567	23,263	1990	2005	35 years
Clare Bridge Cottage of Winter Haven	Winter Haven	FL	—	232	3,006	—		232	3,006	3,238	1,216	2,022	1997	2005	35 years
Sterling House of Winter Haven	Winter Haven	FL	—	438	5,549	—		438	5,549	5,987	2,245	3,742	1997	2005	35 years
Wynwood of Twin Falls	Twin Falls	ID	—	703	6,153	—		703	6,153	6,856	2,489	4,367	1997	2005	35 years
The Hallmark	Chicago	IL	—	11,057	107,517	3,266		11,057	110,783	121,840	44,575	77,265	1990	2005	35 years
The Kenwood of Lake View	Chicago	IL	—	3,072	26,668	—		3,072	26,668	29,740	10,969	18,771	1950	2005	35 years
The Heritage	Des Plaines	IL	32,000	6,871	60,165	(66	)	6,805	60,165	66,970	24,705	42,265	1993	2005	35 years
Devonshire of Hoffman Estates	Hoffman Estates	IL	—	3,886	44,130	—		3,886	44,130	48,016	17,316	30,700	1987	2005	35 years
The Devonshire	Lisle	IL	33,000	7,953	70,400	—		7,953	70,400	78,353	28,846	49,507	1990	2005	35 years
Seasons at Glenview	Northbrook	IL	—	1,988	39,762	—		1,988	39,762	41,750	14,897	26,853	1999	2004	35 years
Hawthorn Lakes	Vernon Hills	IL	—	4,439	35,044	—		4,439	35,044	39,483	14,694	24,789	1987	2005	35 years
The Willows	Vernon Hills	IL	—	1,147	10,041	—		1,147	10,041	11,188	4,123	7,065	1999	2005	35 years
Sterling House of Evansville	Evansville	IN	3,461	357	3,765	—		357	3,765	4,122	1,523	2,599	1998	2005	35 years
Berkshire of Castleton	Indianapolis	IN	—	1,280	11,515	—		1,280	11,515	12,795	4,704	8,091	1986	2005	35 years
Sterling House of Marion	Marion	IN	—	207	3,570	—		207	3,570	3,777	1,444	2,333	1998	2005	35 years
Sterling House of Portage	Portage	IN	—	128	3,649	—		128	3,649	3,777	1,476	2,301	1999	2005	35 years

151



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sterling House of Richmond	Richmond	IN	—	495	4,124	—	495	4,124	4,619	1,668	2,951	1998	2005	35 years
Sterling House of Derby	Derby	KS	—	440	4,422	—	440	4,422	4,862	781	4,081	1994	2011	35 years
Clare Bridge of Leawood	Leawood	KS	3,525	117	5,127	—	117	5,127	5,244	2,074	3,170	2000	2005	35 years
Sterling House of Salina II	Salina	KS	—	300	5,657	—	300	5,657	5,957	1,004	4,953	1996	2011	35 years
Clare Bridge Cottage of Topeka	Topeka	KS	4,721	370	6,825	—	370	6,825	7,195	2,761	4,434	2000	2005	35 years
Sterling House of Wellington	Wellington	KS	—	310	2,434	—	310	2,434	2,744	469	2,275	1994	2011	35 years
Emeritus at Farm Pond	Framingham	MA	—	5,819	33,361	2,430	5,819	35,791	41,610	12,213	29,397	1999	2004	35 years
Emeritus at Cape Cod (WhiteHall)	Hyannis	MA	—	1,277	9,063	—	1,277	9,063	10,340	3,106	7,234	1999	2005	35 years
River Bay Club	Quincy	MA	—	6,101	57,862	—	6,101	57,862	63,963	23,405	40,558	1986	2005	35 years
Woven Hearts of Davison	Davison	MI	—	160	3,189	2,543	160	5,732	5,892	1,386	4,506	1997	2011	35 years
Clare Bridge of Delta Charter	Delta Township	MI	—	730	11,471	—	730	11,471	12,201	1,947	10,254	1998	2011	35 years
Woven Hearts of Delta Charter	Delta Township	MI	—	820	3,313	—	820	3,313	4,133	788	3,345	1998	2011	35 years
Clare Bridge of Farmington Hills I	Farmington Hills	MI	—	580	10,497	—	580	10,497	11,077	2,001	9,076	1994	2011	35 years
Clare Bridge of Farmington Hills II	Farmington Hills	MI	—	700	10,246	—	700	10,246	10,946	2,028	8,918	1994	2011	35 years
Wynwood of Meridian Lansing II	Haslett	MI	—	1,340	6,134	—	1,340	6,134	7,474	1,171	6,303	1998	2011	35 years
Clare Bridge of Grand Blanc I	Holly	MI	—	450	12,373	—	450	12,373	12,823	2,109	10,714	1998	2011	35 years
Wynwood of Grand Blanc II	Holly	MI	—	620	14,627	—	620	14,627	15,247	2,522	12,725	1998	2011	35 years
Wynwood of Northville	Northville	MI	6,942	407	6,068	—	407	6,068	6,475	2,455	4,020	1996	2005	35 years
Clare Bridge of Troy I	Troy	MI	—	630	17,178	—	630	17,178	17,808	2,892	14,916	1998	2011	35 years
Wynwood of Troy II	Troy	MI	—	950	12,503	—	950	12,503	13,453	2,260	11,193	1998	2011	35 years
Wynwood of Utica	Utica	MI	—	1,142	11,808	—	1,142	11,808	12,950	4,777	8,173	1996	2005	35 years
Clare Bridge of Utica	Utica	MI	—	700	8,657	—	700	8,657	9,357	1,568	7,789	1995	2011	35 years
Sterling House of Blaine	Blaine	MN	—	150	1,675	—	150	1,675	1,825	678	1,147	1997	2005	35 years
Clare Bridge of Eden Prairie	Eden Prairie	MN	—	301	6,228	—	301	6,228	6,529	2,520	4,009	1998	2005	35 years
Woven Hearts of Faribault	Faribault	MN	—	530	1,085	—	530	1,085	1,615	240	1,375	1997	2011	35 years
Sterling House of Inver Grove Heights	Inver Grove Heights	MN	2,755	253	2,655	—	253	2,655	2,908	1,074	1,834	1997	2005	35 years
Woven Hearts of Mankato	Mankato	MN	—	490	410	—	490	410	900	173	727	1996	2011	35 years
Edina Park Plaza	Minneapolis	MN	15,040	3,621	33,141	22,975	3,621	56,116	59,737	14,327	45,410	1998	2005	35 years
Clare Bridge of North Oaks	North Oaks	MN	—	1,057	8,296	—	1,057	8,296	9,353	3,356	5,997	1998	2005	35 years
Clare Bridge of Plymouth	Plymouth	MN	—	679	8,675	—	679	8,675	9,354	3,509	5,845	1998	2005	35 years
Woven Hearts of Sauk Rapids	Sauk Rapids	MN	—	480	3,178	—	480	3,178	3,658	575	3,083	1997	2011	35 years
Woven Hearts of Wilmar	Wilmar	MN	—	470	4,833	—	470	4,833	5,303	829	4,474	1997	2011	35 years
Woven Hearts of Winona	Winona	MN	—	800	1,390	—	800	1,390	2,190	486	1,704	1997	2011	35 years
The Solana West County	Ballwin	MO	—	3,100	35,074	35	3,100	35,109	38,209	2,735	35,474	2012	2014	35 years
Clare Bridge of Cary	Cary	NC	—	724	6,466	—	724	6,466	7,190	2,616	4,574	1997	2005	35 years

152



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sterling House of Hickory	Hickory	NC	—	330	10,981	—	330	10,981	11,311	1,868	9,443	1997	2011	35 years
Clare Bridge of Winston-Salem	Winston-Salem	NC	—	368	3,497	—	368	3,497	3,865	1,415	2,450	1997	2005	35 years
Brendenwood	Voorhees Township	NJ	17,294	3,158	29,909	—	3,158	29,909	33,067	12,101	20,966	1987	2005	35 years
Clare Bridge of Westampton	Westampton	NJ	—	881	4,741	—	881	4,741	5,622	1,918	3,704	1997	2005	35 years
Sterling House of Deptford	Woodbury	NJ	—	1,190	5,482	—	1,190	5,482	6,672	1,031	5,641	1998	2011	35 years
Ponce de Leon	Santa Fe	NM	—	—	28,178	—	—	28,178	28,178	11,151	17,027	1986	2005	35 years
Wynwood of Kenmore	Buffalo	NY	12,943	1,487	15,170	—	1,487	15,170	16,657	6,137	10,520	1995	2005	35 years
Villas of Sherman Brook	Clinton	NY	—	947	7,528	—	947	7,528	8,475	3,046	5,429	1991	2005	35 years
Wynwood of Liberty (Manlius)	Manlius	NY	—	890	28,237	—	890	28,237	29,127	4,710	24,417	1994	2011	35 years
Clare Bridge of Perinton	Pittsford	NY	—	611	4,066	—	611	4,066	4,677	1,645	3,032	1997	2005	35 years
The Gables at Brighton	Rochester	NY	—	1,131	9,498	—	1,131	9,498	10,629	3,933	6,696	1988	2005	35 years
Clare Bridge of Niskayuna	Schenectady	NY	—	1,021	8,333	—	1,021	8,333	9,354	3,371	5,983	1997	2005	35 years
Wynwood of Niskayuna	Schenectady	NY	16,202	1,884	16,103	—	1,884	16,103	17,987	6,515	11,472	1996	2005	35 years
Villas of Summerfield	Syracuse	NY	—	1,132	11,434	—	1,132	11,434	12,566	4,626	7,940	1991	2005	35 years
Clare Bridge of Williamsville	Williamsville	NY	6,692	839	3,841	—	839	3,841	4,680	1,554	3,126	1997	2005	35 years
Sterling House of Alliance	Alliance	OH	2,178	392	6,283	—	392	6,283	6,675	2,542	4,133	1998	2005	35 years
Clare Bridge Cottage of Austintown	Austintown	OH	—	151	3,087	—	151	3,087	3,238	1,249	1,989	1999	2005	35 years
Sterling House of Barberton	Barberton	OH	—	440	10,884	—	440	10,884	11,324	1,853	9,471	1997	2011	35 years
Sterling House of Beaver Creek	Beavercreek	OH	—	587	5,381	—	587	5,381	5,968	2,177	3,791	1998	2005	35 years
Sterling House of Englewood (OH)	Clayton	OH	—	630	6,477	—	630	6,477	7,107	1,160	5,947	1997	2011	35 years
Sterling House of Westerville	Columbus	OH	1,800	267	3,600	—	267	3,600	3,867	1,457	2,410	1999	2005	35 years
Sterling House of Greenville	Greenville	OH	—	490	4,144	—	490	4,144	4,634	866	3,768	1997	2011	35 years
Sterling House of Lancaster	Lancaster	OH	—	460	4,662	—	460	4,662	5,122	875	4,247	1998	2011	35 years
Sterling House of Marion	Marion	OH	—	620	3,306	—	620	3,306	3,926	667	3,259	1998	2011	35 years
Sterling House of Salem	Salem	OH	—	634	4,659	—	634	4,659	5,293	1,885	3,408	1998	2005	35 years
Sterling House of Springdale	Springdale	OH	—	1,140	9,134	—	1,140	9,134	10,274	1,578	8,696	1997	2011	35 years
Sterling House of Bartlesville	Bartlesville	OK	—	250	10,529	—	250	10,529	10,779	1,766	9,013	1997	2011	35 years
Sterling House of Bethany	Bethany	OK	—	390	1,499	—	390	1,499	1,889	327	1,562	1994	2011	35 years
Sterling House of Broken Arrow	Broken Arrow	OK	—	940	6,312	6,410	1,873	11,789	13,662	1,965	11,697	1996	2011	35 years
Forest Grove Residential Community	Forest Grove	OR	—	2,320	9,633	—	2,320	9,633	11,953	1,826	10,127	1994	2011	35 years
The Heritage at Mt. Hood	Gresham	OR	—	2,410	9,093	—	2,410	9,093	11,503	1,724	9,779	1988	2011	35 years
McMinnville Residential Estates	McMinnville	OR	1,312	1,230	7,561	—	1,230	7,561	8,791	1,588	7,203	1989	2011	35 years
Sterling House of Denton	Denton	TX	—	1,750	6,712	—	1,750	6,712	8,462	1,175	7,287	1996	2011	35 years
Sterling House of Ennis	Ennis	TX	—	460	3,284	—	460	3,284	3,744	628	3,116	1996	2011	35 years
Sterling House of Kerrville	Kerrville	TX	—	460	8,548	—	460	8,548	9,008	1,458	7,550	1997	2011	35 years

153



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sterling House of Lancaster	Lancaster	TX	—	410	1,478	—		410	1,478	1,888	352	1,536	1997	2011	35 years
Sterling House of Paris	Paris	TX	—	360	2,411	—		360	2,411	2,771	499	2,272	1996	2011	35 years
Sterling House of San Antonio	San Antonio	TX	—	1,400	10,051	—		1,400	10,051	11,451	1,739	9,712	1997	2011	35 years
Sterling House of Temple	Temple	TX	—	330	5,081	—		330	5,081	5,411	930	4,481	1997	2011	35 years
Emeritus at Ridgewood Gardens	Salem	VA	—	1,900	16,219	—		1,900	16,219	18,119	6,229	11,890	1998	2011	35 years
Clare Bridge of Lynwood	Lynnwood	WA	—	1,219	9,573	—		1,219	9,573	10,792	3,873	6,919	1999	2005	35 years
Clare Bridge of Puyallup	Puyallup	WA	9,434	1,055	8,298	—		1,055	8,298	9,353	3,357	5,996	1998	2005	35 years
Columbia Edgewater	Richland	WA	—	960	23,270	—		960	23,270	24,230	4,075	20,155	1990	2011	35 years
Park Place	Spokane	WA	—	1,622	12,895	—		1,622	12,895	14,517	5,399	9,118	1915	2005	35 years
Crossings at Allenmore	Tacoma	WA	—	620	16,186	—		620	16,186	16,806	2,742	14,064	1997	2011	35 years
Union Park at Allenmore	Tacoma	WA	—	1,710	3,326	—		1,710	3,326	5,036	891	4,145	1988	2011	35 years
Crossings at Yakima	Yakima	WA	—	860	15,276	—		860	15,276	16,136	2,668	13,468	1998	2011	35 years
Sterling House of Fond du Lac	Fond du Lac	WI	—	196	1,603	—		196	1,603	1,799	648	1,151	2000	2005	35 years
Clare Bridge of Kenosha	Kenosha	WI	—	551	5,431	2,772		551	8,203	8,754	2,860	5,894	2000	2005	35 years
Woven Hearts of Kenosha	Kenosha	WI	—	630	1,694	—		630	1,694	2,324	341	1,983	1997	2011	35 years
Clare Bridge Cottage of La Crosse	La Crosse	WI	—	621	4,056	1,126		621	5,182	5,803	1,911	3,892	2004	2005	35 years
Sterling House of La Crosse	La Crosse	WI	—	644	5,831	2,637		644	8,468	9,112	2,991	6,121	1998	2005	35 years
Sterling House of Middleton	Middleton	WI	—	360	5,041	—		360	5,041	5,401	867	4,534	1997	2011	35 years
Woven Hearts of Neenah	Neenah	WI	—	340	1,030	—		340	1,030	1,370	232	1,138	1996	2011	35 years
Woven Hearts of Onalaska	Onalaska	WI	—	250	4,949	—		250	4,949	5,199	847	4,352	1995	2011	35 years
Woven Hearts of Oshkosh	Oshkosh	WI	—	160	1,904	—		160	1,904	2,064	374	1,690	1996	2011	35 years
Woven Hearts of Sun Prairie	Sun Prairie	WI	—	350	1,131	—		350	1,131	1,481	247	1,234	1994	2011	35 years
TOTAL FOR BROOKDALE SENIORS HOUSING COMMUNITIES			243,653	190,934	1,803,345	78,885		191,801	1,881,363	2,073,164	614,299	1,458,865
SUNRISE SENIORS HOUSING COMMUNITIES
Sunrise of Chandler	Chandler	AZ	—	4,344	14,455	628		4,439	14,988	19,427	2,537	16,890	2007	2012	35 years
Sunrise of Scottsdale	Scottsdale	AZ	—	2,229	27,575	601		2,255	28,150	30,405	8,237	22,168	2007	2007	35 years
Sunrise of River Road	Tucson	AZ	—	2,971	12,399	221		2,971	12,620	15,591	1,980	13,611	2008	2012	35 years
Sunrise of Lynn Valley	Vancouver	BC	—	11,759	37,424	(11,789	)	8,702	28,692	37,394	8,301	29,093	2002	2007	35 years
Sunrise of Vancouver	Vancouver	BC	—	6,649	31,937	396		6,661	32,321	38,982	9,701	29,281	2005	2007	35 years
Sunrise of Victoria	Victoria	BC	—	8,332	29,970	(8,921	)	6,220	23,161	29,381	6,803	22,578	2001	2007	35 years
Sunrise at La Costa	Carlsbad	CA	—	4,890	20,590	1,385		4,989	21,876	26,865	6,897	19,968	1999	2007	35 years
Sunrise of Carmichael	Carmichael	CA	—	1,269	14,598	437		1,284	15,020	16,304	2,445	13,859	2009	2012	35 years
Sunrise of Fair Oaks	Fair Oaks	CA	—	1,456	23,679	1,830		2,484	24,481	26,965	7,493	19,472	2001	2007	35 years
Sunrise of Mission Viejo	Mission Viejo	CA	—	3,802	24,560	1,330		3,867	25,825	29,692	7,908	21,784	1998	2007	35 years
Sunrise at Canyon Crest	Riverside	CA	—	5,486	19,658	1,646		5,550	21,240	26,790	6,444	20,346	2006	2007	35 years
Sunrise of Rocklin	Rocklin	CA	—	1,378	23,565	870		1,411	24,402	25,813	7,186	18,627	2007	2007	35 years

154



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sunrise of San Mateo	San Mateo	CA	—	2,682	35,335	1,667	2,705	36,979	39,684	10,797	28,887	1999	2007	35 years
Sunrise of Sunnyvale	Sunnyvale	CA	—	2,933	34,361	1,145	2,969	35,470	38,439	10,387	28,052	2000	2007	35 years
Sunrise at Sterling Canyon	Valencia	CA	—	3,868	29,293	4,733	4,041	33,853	37,894	10,535	27,359	1998	2007	35 years
Sunrise of Westlake Village	Westlake Village	CA	—	4,935	30,722	1,052	5,026	31,683	36,709	9,340	27,369	2004	2007	35 years
Sunrise at Yorba Linda	Yorba Linda	CA	—	1,689	25,240	1,384	1,765	26,548	28,313	7,745	20,568	2002	2007	35 years
Sunrise at Cherry Creek	Denver	CO	—	1,621	28,370	1,250	1,721	29,520	31,241	8,802	22,439	2000	2007	35 years
Sunrise at Pinehurst	Denver	CO	—	1,417	30,885	1,881	1,596	32,587	34,183	10,083	24,100	1998	2007	35 years
Sunrise at Orchard	Littleton	CO	—	1,813	22,183	1,379	1,846	23,529	25,375	7,287	18,088	1997	2007	35 years
Sunrise of Westminster	Westminster	CO	—	2,649	16,243	1,555	2,686	17,761	20,447	5,433	15,014	2000	2007	35 years
Sunrise of Stamford	Stamford	CT	—	4,612	28,533	1,810	4,648	30,307	34,955	9,237	25,718	1999	2007	35 years
Sunrise of Jacksonville	Jacksonville	FL	—	2,390	17,671	165	2,420	17,806	20,226	2,952	17,274	2009	2012	35 years
Sunrise of Ivey Ridge	Alpharetta	GA	—	1,507	18,516	1,234	1,513	19,744	21,257	6,044	15,213	1998	2007	35 years
Sunrise of Huntcliff I	Atlanta	GA	—	4,232	66,161	16,359	4,185	82,567	86,752	24,677	62,075	1987	2007	35 years
Sunrise of Huntcliff II	Atlanta	GA	—	2,154	17,137	1,843	2,160	18,974	21,134	5,997	15,137	1998	2007	35 years
Sunrise at East Cobb	Marietta	GA	—	1,797	23,420	1,376	1,806	24,787	26,593	7,552	19,041	1997	2007	35 years
Sunrise of Barrington	Barrington	IL	—	859	15,085	412	884	15,472	16,356	2,576	13,780	2007	2012	35 years
Sunrise of Bloomingdale	Bloomingdale	IL	—	1,287	38,625	1,534	1,382	40,064	41,446	11,769	29,677	2000	2007	35 years
Sunrise of Buffalo Grove	Buffalo Grove	IL	—	2,154	28,021	1,268	2,339	29,104	31,443	8,792	22,651	1999	2007	35 years
Sunrise of Lincoln Park	Chicago	IL	—	3,485	26,687	1,133	3,504	27,801	31,305	7,918	23,387	2003	2007	35 years
Sunrise of Naperville	Naperville	IL	—	1,946	28,538	2,414	2,610	30,288	32,898	9,374	23,524	1999	2007	35 years
Sunrise of Palos Park	Palos Park	IL	—	2,363	42,205	1,087	2,394	43,261	45,655	12,773	32,882	2001	2007	35 years
Sunrise of Park Ridge	Park Ridge	IL	—	5,533	39,557	2,502	5,630	41,962	47,592	12,246	35,346	1998	2007	35 years
Sunrise of Willowbrook	Willowbrook	IL	—	1,454	60,738	2,185	2,057	62,320	64,377	16,701	47,676	2000	2007	35 years
Sunrise of Old Meridian	Carmel	IN	—	8,550	31,746	344	8,550	32,090	40,640	5,250	35,390	2009	2012	35 years
Sunrise of Leawood	Leawood	KS	—	651	16,401	533	768	16,817	17,585	2,574	15,011	2006	2012	35 years
Sunrise of Overland Park	Overland Park	KS	—	650	11,015	412	660	11,417	12,077	1,948	10,129	2007	2012	35 years
Sunrise of Baton Rouge	Baton Rouge	LA	—	1,212	23,547	1,355	1,321	24,793	26,114	7,387	18,727	2000	2007	35 years
Sunrise of Arlington	Arlington	MA	—	86	34,393	969	107	35,341	35,448	10,645	24,803	2001	2007	35 years
Sunrise of Norwood	Norwood	MA	—	2,230	30,968	1,691	2,306	32,583	34,889	9,701	25,188	1997	2007	35 years
Sunrise of Columbia	Columbia	MD	—	1,780	23,083	2,539	1,918	25,484	27,402	7,604	19,798	1996	2007	35 years
Sunrise of Rockville	Rockville	MD	—	1,039	39,216	1,986	1,066	41,175	42,241	11,589	30,652	1997	2007	35 years
Sunrise of Bloomfield	Bloomfield Hills	MI	—	3,736	27,657	1,768	3,852	29,309	33,161	8,602	24,559	2006	2007	35 years
Sunrise of Cascade	Grand Rapids	MI	—	1,273	21,782	531	1,358	22,228	23,586	3,513	20,073	2007	2012	35 years
Sunrise of Northville	Plymouth	MI	—	1,445	26,090	1,067	1,525	27,077	28,602	8,264	20,338	1999	2007	35 years
Sunrise of Rochester	Rochester	MI	—	2,774	38,666	1,117	2,846	39,711	42,557	11,715	30,842	1998	2007	35 years
Sunrise of Troy	Troy	MI	—	1,758	23,727	750	1,860	24,375	26,235	7,422	18,813	2001	2007	35 years
Sunrise of Edina	Edina	MN	—	3,181	24,224	2,646	3,270	26,781	30,051	8,169	21,882	1999	2007	35 years
Sunrise on Providence	Charlotte	NC	—	1,976	19,472	2,095	1,988	21,555	23,543	6,440	17,103	1999	2007	35 years

155



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sunrise at North Hills	Raleigh	NC	—	749	37,091	5,148		762	42,226	42,988	12,285	30,703	2000	2007	35 years
Sunrise of East Brunswick	East Brunswick	NJ	—	2,784	26,173	1,981		3,030	27,908	30,938	8,766	22,172	1999	2007	35 years
Sunrise of Jackson	Jackson	NJ	—	4,009	15,029	502		4,013	15,527	19,540	2,663	16,877	2008	2012	35 years
Sunrise of Morris Plains	Morris Plains	NJ	17,839	1,492	32,052	1,913		1,569	33,888	35,457	10,025	25,432	1997	2007	35 years
Sunrise of Old Tappan	Old Tappan	NJ	16,567	2,985	36,795	1,708		3,042	38,446	41,488	11,387	30,101	1997	2007	35 years
Sunrise of Wall	Wall Township	NJ	—	1,053	19,101	1,206		1,088	20,272	21,360	6,056	15,304	1999	2007	35 years
Sunrise of Wayne	Wayne	NJ	13,160	1,288	24,990	2,333		1,324	27,287	28,611	8,084	20,527	1996	2007	35 years
Sunrise of Westfield	Westfield	NJ	17,438	5,057	23,803	1,882		5,117	25,625	30,742	7,859	22,883	1996	2007	35 years
Sunrise of Woodcliff Lake	Woodcliff Lake	NJ	—	3,493	30,801	1,319		3,537	32,076	35,613	9,780	25,833	2000	2007	35 years
Sunrise of North Lynbrook	Lynbrook	NY	—	4,622	38,087	1,836		4,700	39,845	44,545	12,335	32,210	1999	2007	35 years
Sunrise at Fleetwood	Mount Vernon	NY	—	4,381	28,434	2,154		4,505	30,464	34,969	9,358	25,611	1999	2007	35 years
Sunrise of New City	New City	NY	—	1,906	27,323	1,529		1,950	28,808	30,758	8,663	22,095	1999	2007	35 years
Sunrise of Smithtown	Smithtown	NY	—	2,853	25,621	2,404		3,038	27,840	30,878	8,872	22,006	1999	2007	35 years
Sunrise of Staten Island	Staten Island	NY	—	7,237	23,910	384		7,288	24,243	31,531	9,433	22,098	2006	2007	35 years
Sunrise at Parma	Cleveland	OH	—	695	16,641	1,097		890	17,543	18,433	5,343	13,090	2000	2007	35 years
Sunrise of Cuyahoga Falls	Cuyahoga Falls	OH	—	626	10,239	1,453		777	11,541	12,318	3,627	8,691	2000	2007	35 years
Sunrise of Aurora	Aurora	ON	—	1,570	36,113	(9,069	)	1,167	27,447	28,614	8,101	20,513	2002	2007	35 years
Sunrise of Burlington	Burlington	ON	—	1,173	24,448	644		1,191	25,074	26,265	7,214	19,051	2001	2007	35 years
Sunrise of Unionville	Markham	ON	—	2,322	41,140	(10,031	)	1,775	31,656	33,431	9,218	24,213	2000	2007	35 years
Sunrise of Mississauga	Mississauga	ON	—	3,554	33,631	(8,584	)	2,725	25,876	28,601	7,506	21,095	2000	2007	35 years
Sunrise of Erin Mills	Mississauga	ON	—	1,957	27,020	(6,836	)	1,491	20,650	22,141	6,336	15,805	2007	2007	35 years
Sunrise of Oakville	Oakville	ON	—	2,753	37,489	778		2,758	38,262	41,020	10,969	30,051	2002	2007	35 years
Sunrise of Richmond Hill	Richmond Hill	ON	—	2,155	41,254	(10,251	)	1,621	31,537	33,158	9,036	24,122	2002	2007	35 years
Thorne Mill of Steeles	Vaughan	ON	—	2,563	57,513	(12,356	)	1,320	46,400	47,720	12,578	35,142	2003	2007	35 years
Sunrise of Windsor	Windsor	ON	—	1,813	20,882	560		1,833	21,422	23,255	6,268	16,987	2001	2007	35 years
Sunrise of Abington	Abington	PA	22,410	1,838	53,660	4,843		2,015	58,326	60,341	16,884	43,457	1997	2007	35 years
Sunrise of Blue Bell	Blue Bell	PA	—	1,765	23,920	2,305		1,827	26,163	27,990	8,066	19,924	2006	2007	35 years
Sunrise of Exton	Exton	PA	—	1,123	17,765	1,634		1,187	19,335	20,522	5,921	14,601	2000	2007	35 years
Sunrise of Haverford	Haverford	PA	7,031	941	25,872	1,953		983	27,783	28,766	8,162	20,604	1997	2007	35 years
Sunrise at Granite Run	Media	PA	10,821	1,272	31,781	2,159		1,372	33,840	35,212	9,980	25,232	1997	2007	35 years
Sunrise of Lower Makefield	Morrisville	PA	—	3,165	21,337	418		3,167	21,753	24,920	3,572	21,348	2008	2012	35 years
Sunrise of Westtown	West Chester	PA	—	1,547	22,996	1,538		1,570	24,511	26,081	7,835	18,246	1999	2007	35 years
Sunrise of Hillcrest	Dallas	TX	—	2,616	27,680	655		2,626	28,325	30,951	8,449	22,502	2006	2007	35 years
Sunrise of Fort Worth	Fort Worth	TX	—	2,024	18,587	650		2,083	19,178	21,261	3,174	18,087	2007	2012	35 years
Sunrise of Frisco	Frisco	TX	—	2,523	14,547	324		2,535	14,859	17,394	2,151	15,243	2009	2012	35 years
Sunrise of Cinco Ranch	Katy	TX	—	2,512	21,600	860		2,550	22,422	24,972	3,585	21,387	2007	2012	35 years
Sunrise of Holladay	Holladay	UT	—	2,542	44,771	507		2,577	45,243	47,820	7,186	40,634	2008	2012	35 years
Sunrise of Sandy	Sandy	UT	—	2,576	22,987	180		2,618	23,125	25,743	7,060	18,683	2007	2007	35 years
Sunrise of Alexandria	Alexandria	VA	—	88	14,811	1,993		176	16,716	16,892	5,530	11,362	1998	2007	35 years

156



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Sunrise of Richmond	Richmond	VA	—	1,120	17,446	1,141		1,151	18,556	19,707	5,890	13,817	1999	2007	35 years
Sunrise of Bon Air	Richmond	VA	—	2,047	22,079	543		2,032	22,637	24,669	3,739	20,930	2008	2012	35 years
Sunrise of Springfield	Springfield	VA	8,051	4,440	18,834	2,287		4,466	21,095	25,561	6,439	19,122	1997	2007	35 years
TOTAL FOR SUNRISE SENIORS HOUSING COMMUNITIES			113,317	245,515	2,532,176	57,499		243,561	2,591,629	2,835,190	731,157	2,104,033
ATRIA SENIORS HOUSING COMMUNITIES
Arbour Lake	Calgary	AB	—	2,512	39,188	(5,230	)	2,184	34,286	36,470	2,834	33,636	2003	2014	35 years
Canyon Meadows	Calgary	AB	—	1,617	30,803	(3,633	)	1,399	27,388	28,787	2,329	26,458	1995	2014	35 years
Churchill Manor	Edmonton	AB	—	2,865	30,482	(3,938	)	2,479	26,930	29,409	2,335	27,074	1999	2014	35 years
View at Lethbridge	Lethbridge	AB	—	2,503	24,770	(3,338	)	2,166	21,769	23,935	2,031	21,904	2007	2014	35 years
Victoria Park	Red Deer	AB	—	1,188	22,554	(2,503	)	1,028	20,211	21,239	1,893	19,346	1999	2014	35 years
Ironwood Estates	St. Albert	AB	—	3,639	22,519	(2,928	)	3,154	20,076	23,230	1,875	21,355	1998	2014	35 years
Atria Regency	Mobile	AL	—	950	11,897	1,136		953	13,030	13,983	3,143	10,840	1996	2011	35 years
Atria Chandler Villas	Chandler	AZ	—	3,650	8,450	1,334		3,715	9,719	13,434	3,086	10,348	1988	2011	35 years
Atria Sierra Pointe	Scottsdale	AZ	—	10,930	65,372	1,898		10,962	67,238	78,200	5,595	72,605	2000	2014	35 years
Atria Campana Del Rio	Tucson	AZ	—	5,861	37,284	1,864		5,972	39,037	45,009	8,792	36,217	1964	2011	35 years
Atria Valley Manor	Tucson	AZ	—	1,709	60	732		1,768	733	2,501	311	2,190	1963	2011	35 years
Atria Bell Court Gardens	Tucson	AZ	—	3,010	30,969	1,565		3,020	32,524	35,544	6,495	29,049	1964	2011	35 years
Longlake Chateau	Nanaimo	BC	—	1,874	22,910	(2,810	)	1,622	20,352	21,974	1,930	20,044	1990	2014	35 years
Prince George	Prince George	BC	—	2,066	22,761	(3,150	)	1,787	19,890	21,677	1,879	19,798	2005	2014	35 years
The Victorian	Victoria	BC	—	3,419	16,351	(2,329	)	2,967	14,474	17,441	1,451	15,990	1988	2014	35 years
Victorian at McKenzie	Victoria	BC	—	4,801	25,712	(3,700	)	4,158	22,655	26,813	2,071	24,742	2003	2014	35 years
Atria Burlingame	Burlingame	CA	7,005	2,494	12,373	1,228		2,523	13,572	16,095	3,018	13,077	1977	2011	35 years
Atria Las Posas	Camarillo	CA	—	4,500	28,436	941		4,518	29,359	33,877	5,857	28,020	1997	2011	35 years
Atria Carmichael Oaks	Carmichael	CA	18,360	2,118	49,694	1,399		2,144	51,067	53,211	6,753	46,458	1992	2013	35 years
Atria El Camino Gardens	Carmichael	CA	—	6,930	32,318	12,929		7,123	45,054	52,177	7,552	44,625	1984	2011	35 years
Atria Covina	Covina	CA	—	170	4,131	588		250	4,639	4,889	1,304	3,585	1977	2011	35 years
Atria Daly City	Daly City	CA	7,149	3,090	13,448	1,025		3,102	14,461	17,563	3,120	14,443	1975	2011	35 years
Atria Covell Gardens	Davis	CA	—	2,163	39,657	10,538		2,382	49,976	52,358	10,564	41,794	1987	2011	35 years
Atria Encinitas	Encinitas	CA	—	5,880	9,212	1,288		5,930	10,450	16,380	2,494	13,886	1984	2011	35 years
Atria Escondido	Escondido	CA	—	1,196	7,155	363		1,199	7,515	8,714	875	7,839	2002	2014	35 years
Atria Grass Valley	Grass Valley	CA	11,438	1,965	28,414	660		2,010	29,029	31,039	3,998	27,041	2000	2013	35 years
Atria Golden Creek	Irvine	CA	—	6,900	23,544	1,130		6,926	24,648	31,574	5,464	26,110	1985	2011	35 years
Atria Lafayette	Lafayette	CA	19,278	5,679	56,922	731		5,697	57,635	63,332	7,159	56,173	2007	2013	35 years
Atria Del Sol	Mission Viejo	CA	—	3,500	12,458	8,379		3,781	20,556	24,337	4,107	20,230	1985	2011	35 years
Atria Tamalpais Creek	Novato	CA	—	5,812	24,703	585		5,827	25,273	31,100	5,186	25,914	1978	2011	35 years
Atria Pacific Palisades	Pacific Palisades	CA	—	4,458	17,064	1,302		4,489	18,335	22,824	5,961	16,863	2001	2007	35 years

157



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Atria Palm Desert	Palm Desert	CA	—	2,887	9,843	1,134	3,112	10,752	13,864	4,056	9,808	1988	2011	35 years
Atria Hacienda	Palm Desert	CA	—	6,680	85,900	2,959	6,860	88,679	95,539	16,494	79,045	1989	2011	35 years
Atria Paradise	Paradise	CA	4,702	2,265	28,262	946	2,309	29,164	31,473	3,898	27,575	1999	2013	35 years
Atria Del Rey	Rancho Cucamonga	CA	—	3,290	17,427	4,704	3,464	21,957	25,421	6,137	19,284	1987	2011	35 years
Atria Rocklin	Rocklin	CA	19,633	4,427	52,064	497	4,427	52,561	56,988	3,415	53,573	2001	2015	35 years
Atria Collwood	San Diego	CA	—	290	10,650	989	338	11,591	11,929	2,753	9,176	1976	2011	35 years
Atria Rancho Park	San Dimas	CA	—	4,066	14,306	1,227	4,602	14,997	19,599	3,936	15,663	1975	2011	35 years
Atria Chateau Gardens	San Jose	CA	—	39	487	601	49	1,078	1,127	928	199	1977	2011	35 years
Atria Willow Glen	San Jose	CA	—	8,521	43,168	2,485	8,576	45,598	54,174	8,113	46,061	1976	2011	35 years
Atria Chateau San Juan	San Juan Capistrano	CA	—	5,110	29,436	8,193	5,314	37,425	42,739	10,122	32,617	1985	2011	35 years
Atria Hillsdale	San Mateo	CA	—	5,240	15,956	1,820	5,253	17,763	23,016	3,593	19,423	1986	2011	35 years
Atria Santa Clarita	Santa Clarita	CA	—	3,880	38,366	473	3,880	38,839	42,719	2,571	40,148	2001	2015	35 years
Atria Bayside Landing	Stockton	CA	—	—	467	482	—	949	949	769	180	1998	2011	35 years
Atria Sunnyvale	Sunnyvale	CA	—	6,120	30,068	4,555	6,226	34,517	40,743	7,010	33,733	1977	2011	35 years
Atria Tarzana	Tarzana	CA	—	960	47,547	642	974	48,175	49,149	5,878	43,271	2008	2013	35 years
Atria Vintage Hills	Temecula	CA	—	4,674	44,341	1,517	4,879	45,653	50,532	6,351	44,181	2000	2013	35 years
Atria Grand Oaks	Thousand Oaks	CA	22,297	5,994	50,309	679	6,049	50,933	56,982	6,824	50,158	2002	2013	35 years
Atria Hillcrest	Thousand Oaks	CA	—	6,020	25,635	9,675	6,612	34,718	41,330	9,097	32,233	1987	2011	35 years
Atria Montego Heights	Walnut Creek	CA	—	6,910	15,797	15,684	7,626	30,765	38,391	7,215	31,176	1978	2011	35 years
Atria Valley View	Walnut Creek	CA	—	7,139	53,914	2,446	7,171	56,328	63,499	16,380	47,119	1977	2011	35 years
Atria Applewood	Lakewood	CO	—	3,656	48,657	595	3,686	49,222	52,908	6,741	46,167	2008	2013	35 years
Atria Inn at Lakewood	Lakewood	CO	—	6,281	50,095	1,404	6,323	51,457	57,780	9,512	48,268	1999	2011	35 years
Atria Vistas in Longmont	Longmont	CO	—	2,807	24,877	712	2,831	25,565	28,396	4,226	24,170	2009	2012	35 years
Atria Darien	Darien	CT	18,972	653	37,587	7,271	829	44,682	45,511	8,551	36,960	1997	2011	35 years
Atria Larson Place	Hamden	CT	—	1,850	16,098	1,267	1,873	17,342	19,215	3,956	15,259	1999	2011	35 years
Atria Greenridge Place	Rocky Hill	CT	—	2,170	32,553	1,642	2,388	33,977	36,365	6,585	29,780	1998	2011	35 years
Atria Stamford	Stamford	CT	35,300	1,200	62,432	4,630	1,373	66,889	68,262	13,060	55,202	1975	2011	35 years
Atria Stratford	Stratford	CT	—	3,210	27,865	1,403	3,210	29,268	32,478	6,193	26,285	1999	2011	35 years
Atria Crossroads Place	Waterford	CT	—	2,401	36,495	7,462	2,553	43,805	46,358	8,819	37,539	2000	2011	35 years
Atria Hamilton Heights	West Hartford	CT	—	3,120	14,674	2,798	3,154	17,438	20,592	4,563	16,029	1904	2011	35 years
Atria Windsor Woods	Hudson	FL	—	1,610	32,432	1,725	1,663	34,104	35,767	7,409	28,358	1988	2011	35 years
Atria Baypoint Village	Hudson	FL	14,932	2,083	28,841	5,418	2,298	34,044	36,342	8,065	28,277	1986	2011	35 years
Atria San Pablo	Jacksonville	FL	5,496	1,620	14,920	794	1,648	15,686	17,334	3,193	14,141	1999	2011	35 years
Atria at St. Joseph's	Jupiter	FL	15,859	5,520	30,720	775	5,555	31,460	37,015	4,298	32,717	2007	2013	35 years
Atria Lady Lake	Lady Lake	FL	—	3,752	26,265	224	3,752	26,489	30,241	1,737	28,504	2010	2015	35 years
Atria Heritage at Lake Forest	Sanford	FL	—	3,589	32,586	3,307	3,864	35,618	39,482	6,973	32,509	2002	2011	35 years
Atria Evergreen Woods	Spring Hill	FL	—	2,370	28,371	3,163	2,529	31,375	33,904	7,613	26,291	1981	2011	35 years
Atria North Point	Alpharetta	GA	40,991	4,830	78,318	1,328	4,853	79,623	84,476	7,837	76,639	2007	2014	35 years

158



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Atria Buckhead	Atlanta	GA	—	3,660	5,274	839		3,688	6,085	9,773	1,773	8,000	1996	2011	35 years
Atria Mableton	Austell	GA	—	1,911	18,879	355		1,942	19,203	21,145	2,661	18,484	2000	2013	35 years
Atria Johnson Ferry	Marietta	GA	—	990	6,453	452		995	6,900	7,895	1,613	6,282	1995	2011	35 years
Atria Tucker	Tucker	GA	—	1,103	20,679	423		1,120	21,085	22,205	2,889	19,316	2000	2013	35 years
Atria Glen Ellyn	Glen Ellyn	IL	—	2,455	34,064	2,159		2,602	36,076	38,678	11,008	27,670	2000	2007	35 years
Atria Newburgh	Newburgh	IN	—	1,150	22,880	540		1,150	23,420	24,570	4,571	19,999	1998	2011	35 years
Atria Hearthstone East	Topeka	KS	—	1,150	20,544	908		1,215	21,387	22,602	4,535	18,067	1998	2011	35 years
Atria Hearthstone West	Topeka	KS	—	1,230	28,379	2,002		1,245	30,366	31,611	6,747	24,864	1987	2011	35 years
Atria Highland Crossing	Covington	KY	—	1,677	14,393	1,329		1,689	15,710	17,399	3,929	13,470	1988	2011	35 years
Atria Summit Hills	Crestview Hills	KY	—	1,780	15,769	806		1,789	16,566	18,355	3,648	14,707	1998	2011	35 years
Atria Elizabethtown	Elizabethtown	KY	—	850	12,510	545		869	13,036	13,905	2,711	11,194	1996	2011	35 years
Atria St. Matthews	Louisville	KY	—	939	9,274	709		953	9,969	10,922	2,895	8,027	1998	2011	35 years
Atria Stony Brook	Louisville	KY	—	1,860	17,561	961		1,953	18,429	20,382	3,910	16,472	1999	2011	35 years
Atria Springdale	Louisville	KY	—	1,410	16,702	1,112		1,410	17,814	19,224	3,813	15,411	1999	2011	35 years
Atria Marland Place	Andover	MA	—	1,831	34,592	19,191		1,996	53,618	55,614	11,194	44,420	1996	2011	35 years
Atria Longmeadow Place	Burlington	MA	—	5,310	58,021	1,332		5,383	59,280	64,663	10,853	53,810	1998	2011	35 years
Atria Fairhaven (Alden)	Fairhaven	MA	—	1,100	16,093	779		1,148	16,824	17,972	3,299	14,673	1999	2011	35 years
Atria Woodbriar Place	Falmouth	MA	18,440	4,630	27,314	5,793		6,433	31,304	37,737	4,880	32,857	2013	2013	35 years
Atria Woodbriar	Falmouth	MA	—	1,970	43,693	20,043		1,974	63,732	65,706	8,007	57,699	1975	2011	35 years
Atria Draper Place	Hopedale	MA	—	1,140	17,794	1,309		1,226	19,017	20,243	3,866	16,377	1998	2011	35 years
Atria Merrimack Place	Newburyport	MA	—	2,774	40,645	1,313		2,809	41,923	44,732	7,656	37,076	2000	2011	35 years
Atria Marina Place	Quincy	MA	—	2,590	33,899	1,481		2,755	35,215	37,970	6,963	31,007	1999	2011	35 years
Riverheights Terrace	Brandon	MB	—	799	27,708	(3,497	)	692	24,318	25,010	2,178	22,832	2001	2014	35 years
Amber Meadow	Winnipeg	MB	—	3,047	17,821	(1,879	)	2,638	16,351	18,989	1,681	17,308	2000	2014	35 years
The Westhaven	Winnipeg	MB	—	871	23,162	(2,829	)	765	20,439	21,204	1,909	19,295	1988	2014	35 years
Atria Manresa	Annapolis	MD	—	4,193	19,000	1,696		4,465	20,424	24,889	4,256	20,633	1920	2011	35 years
Atria Salisbury	Salisbury	MD	—	1,940	24,500	699		1,959	25,180	27,139	4,740	22,399	1995	2011	35 years
Atria Kennebunk	Kennebunk	ME	—	1,090	23,496	793		1,104	24,275	25,379	4,946	20,433	1998	2011	35 years
Atria Ann Arbor	Ann Arbor	MI	—	1,703	15,857	1,898		1,795	17,663	19,458	5,718	13,740	2001	2007	35 years
Atria Kinghaven	Riverview	MI	13,296	1,440	26,260	1,575		1,591	27,684	29,275	5,953	23,322	1987	2011	35 years
Ste. Anne’s Court	Fredericton	NB	—	1,221	29,626	(3,561	)	1,056	26,230	27,286	2,304	24,982	2002	2014	35 years
Chateau De Champlain	St. John	NB	—	796	24,577	(2,588	)	699	22,086	22,785	2,024	20,761	2002	2014	35 years
Atria Merrywood	Charlotte	NC	—	1,678	36,892	2,391		1,724	39,237	40,961	8,450	32,511	1991	2011	35 years
Atria Southpoint	Durham	NC	16,272	2,130	25,920	661		2,135	26,576	28,711	3,742	24,969	2009	2013	35 years
Atria Oakridge	Raleigh	NC	15,093	1,482	28,838	591		1,514	29,397	30,911	4,159	26,752	2009	2013	35 years
Atria Cranford	Cranford	NJ	25,562	8,260	61,411	3,755		8,382	65,044	73,426	13,167	60,259	1993	2011	35 years
Atria Tinton Falls	Tinton Falls	NJ	—	6,580	13,258	1,160		6,593	14,405	20,998	3,703	17,295	1999	2011	35 years
Atria Sunlake	Las Vegas	NV	—	7	732	822		7	1,554	1,561	1,268	293	1998	2011	35 years
Atria Sutton	Las Vegas	NV	—	—	863	989		39	1,813	1,852	1,422	430	1998	2011	35 years

159



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Atria Seville	Las Vegas	NV	—	—	796	1,287		11	2,072	2,083	1,196	887	1999	2011	35 years
Atria Summit Ridge	Reno	NV	—	4	407	421		9	823	832	768	64	1997	2011	35 years
Atria Shaker	Albany	NY	—	1,520	29,667	1,056		1,626	30,617	32,243	6,061	26,182	1997	2011	35 years
Atria Crossgate	Albany	NY	—	1,080	20,599	948		1,100	21,527	22,627	4,441	18,186	1980	2011	35 years
Atria Woodlands	Ardsley	NY	45,991	7,660	65,581	2,105		7,693	67,653	75,346	13,060	62,286	2005	2011	35 years
Atria Bay Shore	Bay Shore	NY	15,275	4,440	31,983	1,421		4,448	33,396	37,844	6,697	31,147	1900	2011	35 years
Atria Briarcliff Manor	Briarcliff Manor	NY	—	6,560	33,885	1,726		6,613	35,558	42,171	7,358	34,813	1997	2011	35 years
Atria Riverdale	Bronx	NY	—	1,020	24,149	13,612		1,065	37,716	38,781	7,903	30,878	1999	2011	35 years
Atria Delmar Place	Delmar	NY	—	1,201	24,850	585		1,219	25,417	26,636	2,759	23,877	2004	2013	35 years
Atria East Northport	East Northport	NY	—	9,960	34,467	18,618		10,018	53,027	63,045	8,747	54,298	1996	2011	35 years
Atria Glen Cove	Glen Cove	NY	—	2,035	25,190	1,028		2,049	26,204	28,253	10,009	18,244	1997	2011	35 years
Atria Great Neck	Great Neck	NY	—	3,390	54,051	4,993		3,390	59,044	62,434	10,096	52,338	1998	2011	35 years
Atria Cutter Mill	Great Neck	NY	33,628	2,750	47,919	2,050		2,756	49,963	52,719	9,322	43,397	1999	2011	35 years
Atria Huntington	Huntington Station	NY	—	8,190	1,169	1,927		8,232	3,054	11,286	1,715	9,571	1987	2011	35 years
Atria Hertlin House	Lake Ronkonkoma	NY	—	7,886	16,391	1,465		7,886	17,856	25,742	2,911	22,831	2002	2012	35 years
Atria Lynbrook	Lynbrook	NY	—	3,145	5,489	914		3,172	6,376	9,548	2,054	7,494	1996	2011	35 years
Atria Tanglewood	Lynbrook	NY	24,575	4,120	37,348	845		4,145	38,168	42,313	7,179	35,134	2005	2011	35 years
Atria 86th Street	New York	NY	—	80	73,685	5,392		167	78,990	79,157	15,648	63,509	1998	2011	35 years
Atria on the Hudson	Ossining	NY	—	8,123	63,089	3,115		8,157	66,170	74,327	13,720	60,607	1972	2011	35 years
Atria Penfield	Penfield	NY	—	620	22,036	822		723	22,755	23,478	4,617	18,861	1972	2011	35 years
Atria Plainview	Plainview	NY	12,748	2,480	16,060	1,033		2,630	16,943	19,573	3,785	15,788	2000	2011	35 years
Atria Rye Brook	Port Chester	NY	42,312	9,660	74,936	1,499		9,716	76,379	86,095	14,357	71,738	2004	2011	35 years
Atria Kew Gardens	Queens	NY	—	3,051	66,013	8,034		3,074	74,024	77,098	13,332	63,766	1999	2011	35 years
Atria Forest Hills	Queens	NY	—	2,050	16,680	777		2,050	17,457	19,507	3,714	15,793	2001	2011	35 years
Atria Greece	Rochester	NY	—	410	14,967	945		639	15,683	16,322	3,324	12,998	1970	2011	35 years
Atria on Roslyn Harbor	Roslyn	NY	65,000	12,909	72,720	1,863		12,974	74,518	87,492	13,834	73,658	2006	2011	35 years
Atria Guilderland	Slingerlands	NY	—	1,170	22,414	454		1,171	22,867	24,038	4,487	19,551	1950	2011	35 years
Atria South Setauket	South Setauket	NY	—	8,450	14,534	1,397		8,832	15,549	24,381	4,680	19,701	1967	2011	35 years
The Court at Brooklin	Brooklin	ON	—	2,515	35,602	(4,263	)	2,197	31,657	33,854	2,655	31,199	2004	2014	35 years
Burlington Gardens	Burlington	ON	—	7,560	50,744	(7,312	)	6,542	44,450	50,992	3,616	47,376	2008	2014	35 years
The Court at Rushdale	Hamilton	ON	—	1,799	34,633	(4,155	)	1,557	30,720	32,277	2,591	29,686	2004	2014	35 years
Kingsdale Chateau	Kingston	ON	—	2,221	36,272	(4,373	)	1,924	32,196	34,120	2,715	31,405	2000	2014	35 years
Crystal View Lodge	Nepean	ON	—	1,587	37,243	(4,493	)	1,546	32,791	34,337	2,810	31,527	2000	2014	35 years
The Court at Barrhaven	Nepean	ON	—	1,778	33,922	(3,679	)	1,562	30,459	32,021	2,610	29,411	2004	2014	35 years
Stamford Estates	Niagara Falls	ON	—	1,414	29,439	(3,800	)	1,224	25,829	27,053	2,280	24,773	2005	2014	35 years
Sherbrooke Heights	Peterborough	ON	—	2,485	33,747	(3,642	)	2,154	30,436	32,590	2,618	29,972	2001	2014	35 years
Anchor Pointe	St. Catharines	ON	—	8,214	24,056	(3,910	)	7,108	21,252	28,360	2,094	26,266	2000	2014	35 years
The Court at Pringle Creek	Whitby	ON	—	2,965	39,206	(4,859	)	2,619	34,693	37,312	2,969	34,343	2002	2014	35 years

160



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Atria Bethlehem	Bethlehem	PA	—	2,479	22,870	766		2,492	23,623	26,115	5,065	21,050	CIP	CIP	CIP
Atria Center City	Philadelphia	PA	22,055	3,460	18,291	2,650		3,475	20,926	24,401	4,648	19,753	1964	2011	35 years
Atria Squire’s Ridge	Philadelphia	PA	—	—	1,877	—		—	1,877	1,877	—	1,877	1964	2011	35 years
Atria Woodbridge Place	Phoenixville	PA	—	1,510	19,130	881		1,510	20,011	21,521	4,200	17,321	1996	2011	35 years
Atria South Hills	Pittsburgh	PA	—	880	10,884	617		895	11,486	12,381	2,792	9,589	1998	2011	35 years
La Residence Steger	Saint-Laurent	QC	—	1,995	10,926	(1,021	)	1,764	10,136	11,900	1,191	10,709	1999	2014	35 years
Atria Bay Spring Village	Barrington	RI	—	2,000	33,400	2,240		2,076	35,564	37,640	7,831	29,809	2000	2011	35 years
Atria Harborhill Place	East Greenwich	RI	—	2,089	21,702	1,176		2,115	22,852	24,967	4,699	20,268	1835	2011	35 years
Atria Lincoln Place	Lincoln	RI	—	1,440	12,686	779		1,470	13,435	14,905	3,207	11,698	2000	2011	35 years
Atria Aquidneck Place	Portsmouth	RI	—	2,810	31,623	559		2,810	32,182	34,992	5,967	29,025	1999	2011	35 years
Atria Forest Lake	Columbia	SC	—	670	13,946	714		684	14,646	15,330	2,938	12,392	1999	2011	35 years
Primrose Chateau	Saskatoon	SK	—	2,611	32,729	(3,984	)	2,278	29,078	31,356	2,490	28,866	1996	2014	35 years
Mulberry Estates	Moose Jaw	SK	—	2,173	31,791	(3,891	)	1,965	28,108	30,073	2,458	27,615	2003	2014	35 years
Queen Victoria	Regina	SK	—	3,018	34,109	(4,063	)	2,611	30,453	33,064	2,555	30,509	2000	2014	35 years
Atria Weston Place	Knoxville	TN	9,352	793	7,961	1,016		967	8,803	9,770	2,149	7,621	1993	2011	35 years
Atria Village at Arboretum	Austin	TX	—	8,280	61,764	667		8,322	62,389	70,711	9,249	61,462	2009	2012	35 years
Atria Carrollton	Carrollton	TX	6,592	360	20,465	1,147		370	21,602	21,972	4,464	17,508	1998	2011	35 years
Atria Grapevine	Grapevine	TX	—	2,070	23,104	671		2,076	23,769	25,845	4,708	21,137	1999	2011	35 years
Atria Westchase	Houston	TX	—	2,318	22,278	884		2,322	23,158	25,480	4,733	20,747	1999	2011	35 years
Atria Cinco Ranch	Katy	TX	—	3,171	73,287	570		3,174	73,854	77,028	4,511	72,517	2010	2015	35 years
Atria Kingwood	Kingwood	TX	—	1,170	4,518	542		1,189	5,041	6,230	1,405	4,825	1998	2011	35 years
Atria at Hometown	North Richland Hills	TX	—	1,932	30,382	998		1,963	31,349	33,312	4,534	28,778	2007	2013	35 years
Atria Canyon Creek	Plano	TX	—	3,110	45,999	2,477		3,148	48,438	51,586	6,639	44,947	2009	2013	35 years
Atria Richardson	Richardson	TX	—	1,590	23,662	847		1,600	24,499	26,099	4,857	21,242	1998	2011	35 years
Atria Cypresswood	Spring	TX	—	880	9,192	956		897	10,131	11,028	2,147	8,881	1996	2011	35 years
Atria Sugar Land	Sugar Land	TX	—	970	17,542	774		980	18,306	19,286	3,695	15,591	1999	2011	35 years
Atria Copeland	Tyler	TX	—	1,879	17,901	759		1,886	18,653	20,539	3,941	16,598	1997	2011	35 years
Atria Willow Park	Tyler	TX	—	920	31,271	899		928	32,162	33,090	6,729	26,361	1985	2011	35 years
Atria Virginia Beach (Hilltop)	Virginia Beach	VA	—	1,749	33,004	639		1,754	33,638	35,392	6,829	28,563	1998	2011	35 years
Amberwood	Port Richey	FL	—	1,320	—	—		1,320	—	1,320	—	1,320	N/A	2011	N/A
Other Projects			—	—	2,419	—		—	2,419	2,419	—	2,419	CIP	CIP	35 years
TOTAL FOR ATRIA SENIORS HOUSING COMMUNITIES			607,603	533,579	4,911,325	239,854		535,879	5,148,879	5,684,758	896,737	4,788,021
OTHER SENIORS HOUSING COMMUNITIES
Elmcroft of Grayson Valley	Birmingham	AL	—	1,040	19,145	486		1,046	19,625	20,671	3,556	17,115	2000	2011	35 years
Elmcroft of Byrd Springs	Hunstville	AL	—	1,720	11,270	463		1,723	11,730	13,453	2,338	11,115	1999	2011	35 years
Elmcroft of Heritage Woods	Mobile	AL	—	1,020	10,241	489		1,020	10,730	11,750	2,161	9,589	2000	2011	35 years

161



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Elmcroft of Halcyon	Montgomery	AL	—	220	5,476	—		220	5,476	5,696	1,591	4,105	1999	2006	35 years
Rosewood Manor (AL)	Scottsboro	AL	—	680	4,038	—		680	4,038	4,718	729	3,989	1998	2011	35 years
West Shores	Hot Springs	AR	—	1,326	10,904	996		1,326	11,900	13,226	3,622	9,604	1988	2005	35 years
Elmcroft of Maumelle	Maumelle	AR	—	1,252	7,601	—		1,252	7,601	8,853	2,208	6,645	1997	2006	35 years
Elmcroft of Mountain Home	Mountain Home	AR	—	204	8,971	—		204	8,971	9,175	2,606	6,569	1997	2006	35 years
Elmcroft of Sherwood	Sherwood	AR	—	1,320	5,693	—		1,320	5,693	7,013	1,654	5,359	1997	2006	35 years
Chandler Memory Care Community	Chandler	AZ	—	2,910	8,882	184		3,094	8,882	11,976	1,628	10,348	2012	2012	35 years
Cottonwood Village	Cottonwood	AZ	—	1,200	15,124	—		1,200	15,124	16,324	4,997	11,327	1986	2005	35 years
Silver Creek Inn Memory Care Community	Gilbert	AZ	—	890	5,918	—		890	5,918	6,808	958	5,850	2012	2012	35 years
Prestige Assisted Living at Green Valley	Green Valley	AZ	—	1,227	13,977	—		1,227	13,977	15,204	975	14,229	1998	2014	35 years
Prestige Assisted Living at Lake Havasu City	Lake Havasu	AZ	—	594	14,792	—		594	14,792	15,386	1,025	14,361	1999	2014	35 years
Lakeview Terrace	Lake Havasu City	AZ	—	706	7,810	—		706	7,810	8,516	552	7,964	2009	2015	35 years
Arbor Rose	Mesa	AZ	—	1,100	11,880	2,434		1,100	14,314	15,414	3,521	11,893	1999	2011	35 years
The Stratford	Phoenix	AZ	—	1,931	33,576	—		1,931	33,576	35,507	2,333	33,174	2001	2014	35 years
Amber Creek Inn Memory Care	Scottsdale	AZ	—	2,310	6,322	677		2,185	7,124	9,309	289	9,020	1986	2011	35 years
Prestige Assisted Living at Sierra Vista	Sierra Vista	AZ	—	295	13,224	—		295	13,224	13,519	914	12,605	1999	2014	35 years
The Woodmark at Sun City	Sun City	NM	—	964	35,093	302		985	35,374	36,359	2,188	34,171	2000	2015	35 years
Elmcroft of Tempe	Tempe	AZ	—	1,090	12,942	855		1,090	13,797	14,887	2,664	12,223	1999	2011	35 years
Elmcroft of River Centre	Tucson	AZ	—	1,940	5,195	448		1,940	5,643	7,583	1,315	6,268	1999	2011	35 years
Sierra Ridge Memory Care	Auburn	CA	—	681	6,071	—		681	6,071	6,752	445	6,307	2011	2014	35 years
Careage Banning	Banning	CA	—	2,970	16,037	—		2,970	16,037	19,007	3,077	15,930	2004	2011	35 years
Las Villas Del Carlsbad	Carlsbad	CA	—	1,760	30,469	—		1,760	30,469	32,229	8,851	23,378	1987	2006	35 years
Prestige Assisted Living at Chico	Chico	CA	—	1,069	14,929	—		1,069	14,929	15,998	1,039	14,959	1998	2014	35 years
Villa Bonita	Chula Vista	CA	—	1,610	9,169	—		1,610	9,169	10,779	1,859	8,920	1989	2011	35 years
The Meadows Senior Living	Elk Grove	CA	—	1,308	19,667	—		1,308	19,667	20,975	1,417	19,558	2003	2014	35 years
Las Villas Del Norte	Escondido	CA	—	2,791	32,632	—		2,791	32,632	35,423	9,479	25,944	1986	2006	35 years
Alder Bay Assisted Living	Eureka	CA	—	1,170	5,228	(70	)	1,170	5,158	6,328	1,043	5,285	1997	2011	35 years
Elmcroft of La Mesa	La Mesa	CA	—	2,431	6,101	—		2,431	6,101	8,532	1,772	6,760	1997	2006	35 years
Grossmont Gardens	La Mesa	CA	—	9,104	59,349	—		9,104	59,349	68,453	17,240	51,213	1964	2006	35 years
Palms, The	La Mirada	CA	—	2,700	43,919	—		2,700	43,919	46,619	4,774	41,845	1990	2013	35 years
Prestige Assisted Living at Lancaster	Lancaster	CA	—	718	10,459	—		718	10,459	11,177	728	10,449	1999	2014	35 years
Prestige Assisted Living at Marysville	Marysville	CA	—	741	7,467	—		741	7,467	8,208	522	7,686	1999	2014	35 years

162



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Mountview Retirement Residence	Montrose	CA	—	1,089	15,449	—		1,089	15,449	16,538	4,488	12,050	1974	2006	35 years
Redwood Retirement	Napa	CA	—	2,798	12,639	—		2,798	12,639	15,437	1,404	14,033	1986	2013	35 years
Prestige Assisted Living at Oroville	Oroville	CA	—	638	8,079	—		638	8,079	8,717	563	8,154	1999	2014	35 years
Valencia Commons	Rancho Cucamonga	CA	—	1,439	36,363	—		1,439	36,363	37,802	3,941	33,861	2002	2013	35 years
Mission Hills	Rancho Mirage	CA	—	6,800	3,637	—		6,800	3,637	10,437	1,150	9,287	1999	2011	35 years
Shasta Estates	Redding	CA	—	1,180	23,463	—		1,180	23,463	24,643	2,547	22,096	2009	2013	35 years
The Vistas	Redding	CA	—	1,290	22,033	—		1,290	22,033	23,323	3,887	19,436	2007	2011	35 years
Elmcroft of Point Loma	San Diego	CA	—	2,117	6,865	—		2,117	6,865	8,982	1,994	6,988	1999	2006	35 years
Regency of Evergreen Valley	San Jose	CA	—	2,700	7,994	—		2,700	7,994	10,694	1,916	8,778	1998	2011	35 years
Villa del Obispo	San Juan Capistrano	CA	—	2,660	9,560	71		2,660	9,631	12,291	1,848	10,443	1985	2011	35 years
Villa Santa Barbara	Santa Barbara	CA	—	1,219	12,426	1,189		1,219	13,615	14,834	4,118	10,716	1977	2005	35 years
Skyline Place Senior Living	Sonora	CA	—	1,815	28,472	—		1,815	28,472	30,287	2,061	28,226	1996	2014	35 years
Oak Terrace Memory Care	Soulsbyville	CA	—	1,146	5,275	—		1,146	5,275	6,421	393	6,028	1999	2014	35 years
Eagle Lake Village	Susanville	CA	—	1,165	6,719	—		1,165	6,719	7,884	992	6,892	2006	2012	35 years
Bonaventure, The	Ventura	CA	—	5,294	32,747	—		5,294	32,747	38,041	3,609	34,432	2005	2013	35 years
Prestige Assisted Living at Visalia	Visalia	CA	—	1,300	8,378	—		1,300	8,378	9,678	590	9,088	1998	2014	35 years
Vista Village	Vista	CA	—	1,630	5,640	61		1,630	5,701	7,331	1,264	6,067	1980	2011	35 years
Rancho Vista	Vista	CA	—	6,730	21,828	—		6,730	21,828	28,558	6,341	22,217	1982	2006	35 years
Westminster Terrace	Westminster	CA	—	1,700	11,514	20		1,700	11,534	13,234	2,057	11,177	2001	2011	35 years
Highland Trail	Broomfield	CO	—	2,511	26,431	—		2,511	26,431	28,942	2,886	26,056	2009	2013	35 years
Caley Ridge	Englewood	CO	—	1,157	13,133	—		1,157	13,133	14,290	1,939	12,351	1999	2012	35 years
Garden Square at Westlake	Greeley	CO	—	630	8,211	—		630	8,211	8,841	1,524	7,317	1998	2011	35 years
Garden Square of Greeley	Greeley	CO	—	330	2,735	—		330	2,735	3,065	525	2,540	1995	2011	35 years
Lakewood Estates	Lakewood	CO	—	1,306	21,137	—		1,306	21,137	22,443	2,298	20,145	1988	2013	35 years
Sugar Valley Estates	Loveland	CO	—	1,255	21,837	—		1,255	21,837	23,092	2,373	20,719	2009	2013	35 years
Devonshire Acres	Sterling	CO	—	950	13,569	(2,922	)	965	10,632	11,597	1,947	9,650	1979	2011	35 years
Gardenside Terrace	Branford	CT	—	7,000	31,518	—		7,000	31,518	38,518	5,564	32,954	1999	2011	35 years
Hearth at Tuxis Pond	Madison	CT	—	1,610	44,322	—		1,610	44,322	45,932	7,459	38,473	2002	2011	35 years
White Oaks	Manchester	CT	—	2,584	34,507	—		2,584	34,507	37,091	3,758	33,333	2014	2015	40 years
Willows Care Home	Canford	ESX	—	4,695	6,983	(1,901	)	3,931	5,846	9,777	347	9,430	1986	2015	40 years
Cedars Care Home	Canford	ESX	—	2,649	4,925	(1,233	)	2,217	4,124	6,341	252	6,089	1999	2011	35 years
Hampton Manor Belleview	Belleview	FL	—	390	8,337	—		390	8,337	8,727	1,536	7,191	1988	2011	35 years
Sabal House	Cantonment	FL	—	430	5,902	—		430	5,902	6,332	1,061	5,271	1999	2011	35 years
Bristol Park of Coral Springs	Coral Springs	FL	—	3,280	11,877	—		3,280	11,877	15,157	2,257	12,900	1999	2011	35 years
Stanley House	Defuniak Springs	FL	—	410	5,659	—		410	5,659	6,069	1,018	5,051	1999	2011	35 years

163



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
The Peninsula	Hollywood	FL	—	3,660	9,122	62		3,660	9,184	12,844	1,991	10,853	1972	2011	35 years
Elmcroft of Timberlin Parc	Jacksonville	FL	—	455	5,905	—		455	5,905	6,360	1,715	4,645	1998	2006	35 years
Forsyth House	Milton	FL	—	610	6,503	—		610	6,503	7,113	1,156	5,957	1999	2011	35 years
Princeton Village of Largo	Largo	FL	—	1,718	10,438	116		1,718	10,554	12,272	871	11,401	1992	2015	35 years
Barrington Terrace of Fort Myers	Fort Myers	FL	—	2,105	18,190	244		2,110	18,429	20,539	1,390	19,149	2001	2015	35 years
Barrington Terrace of Naples	Naples	FL	—	2,596	18,716	328		2,606	19,034	21,640	1,464	20,176	2004	2015	35 years
The Carlisle Naples	Naples	FL	—	8,406	78,091	—		8,406	78,091	86,497	13,474	73,023	1998	2011	35 years
Naples ALZ Development	Naples	FL	—	2,983	—	—		2,983	—	2,983	—	2,983	CIP	CIP	CIP
Hampton Manor at 24th Road	Ocala	FL	—	690	8,767	—		690	8,767	9,457	1,559	7,898	1996	2011	35 years
Hampton Manor at Deerwood	Ocala	FL	—	790	5,605	3,648		983	9,060	10,043	1,162	8,881	2005	2011	35 years
Las Palmas	Palm Coast	FL	—	984	30,009	—		984	30,009	30,993	3,249	27,744	2009	2013	35 years
Princeton Village of Palm Coast	Palm Coast	FL	—	1,958	24,525	11		1,958	24,536	26,494	1,692	24,802	2007	2015	35 years
Outlook Pointe at Pensacola	Pensacola	FL	—	2,230	2,362	152		2,230	2,514	4,744	693	4,051	1999	2011	35 years
Magnolia House	Quincy	FL	—	400	5,190	—		400	5,190	5,590	949	4,641	1999	2011	35 years
Outlook Pointe at Tallahassee	Tallahassee	FL	—	2,430	17,745	443		2,430	18,188	20,618	3,322	17,296	1999	2011	35 years
Magnolia Place	Tallahassee	FL	—	640	8,013	79		640	8,092	8,732	1,396	7,336	1999	2011	35 years
Bristol Park of Tamarac	Tamarac	FL	—	3,920	14,130	—		3,920	14,130	18,050	2,602	15,448	2000	2011	35 years
Elmcroft of Carrolwood	Tampa	FL	—	5,410	20,944	616		5,410	21,560	26,970	4,000	22,970	2001	2011	35 years
Arbor Terrace of Athens	Athens	GA	—	1,767	16,442	237		1,770	16,676	18,446	1,122	17,324	1998	2015	35 years
Arbor Terrace at Cascade	Atlanta	GA	—	3,052	9,040	236		3,057	9,271	12,328	910	11,418	1999	2015	35 years
Augusta Gardens	Augusta	GA	—	530	10,262	308		543	10,557	11,100	1,890	9,210	1997	2011	35 years
Benton House of Covington	Covington	GA	7,736	1,297	11,397	64		1,297	11,461	12,758	821	11,937	2009	2015	35 years
Arbor Terrace of Decatur	Decatur	GA	10,500	3,102	19,599	(1,639	)	1,292	19,770	21,062	1,321	19,741	1990	2015	35 years
Benton House of Douglasville	Douglasville	GA	—	1,697	15,542	16		1,697	15,558	17,255	1,094	16,161	2010	2015	35 years
Elmcroft of Martinez	Martinez	GA	—	408	6,764	—		408	6,764	7,172	1,836	5,336	1997	2007	35 years
Benton House of Newnan	Newnan	GA	—	1,474	17,487	76		1,474	17,563	19,037	1,196	17,841	2010	2015	35 years
Elmcroft of Roswell	Roswell	GA	—	1,867	15,835	—		1,867	15,835	17,702	1,062	16,640	1997	2014	35 years
Benton Village of Stockbridge	Stockbridge	GA	—	2,221	21,989	182		2,221	22,171	24,392	1,552	22,840	2008	2015	35 years
Benton House of Sugar Hill	Sugar Hill	GA	—	2,173	14,937	73		2,173	15,010	17,183	1,105	16,078	2010	2015	35 years
Mayflower Care Home	Northfleet	GS	—	4,330	7,519	(1,929	)	3,625	6,295	9,920	381	9,539	2012	2015	40 years
Villas of St. James - Breese	Breese	IL	—	671	6,849	—		671	6,849	7,520	560	6,960	2009	2015	35 years
Villas of Holly Brook - Chatham	Chatham	IL	—	1,185	8,910	—		1,185	8,910	10,095	749	9,346	2012	2015	35 years
Villas of Holly Brook - Effingham	Effingham	IL	—	508	6,624	—		508	6,624	7,132	526	6,606	2011	2015	35 years
Villas of Holly Brook - Herrin	Herrin	IL	—	2,175	9,605	—		2,175	9,605	11,780	930	10,850	2012	2015	35 years
Villas of Holly Brook - Marshall	Marshall	IL	—	1,461	4,881	—		1,461	4,881	6,342	550	5,792	2012	2015	35 years
Villas of Holly Brook	Newton	IL	—	458	4,590	—		458	4,590	5,048	405	4,643	2011	2015	35 years

164



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Wyndcrest Assisted Living	Rochester	IL	—	570	6,536	79		570	6,615	7,185	504	6,681	2005	2015	35 years
Villas of Holly Brook, Shelbyville	Shelbyville	IL	—	2,292	3,351	—		2,292	3,351	5,643	605	5,038	2011	2015	35 years
Georgetowne Place	Fort Wayne	IN	—	1,315	18,185	238		1,315	18,423	19,738	5,888	13,850	1987	2005	35 years
The Harrison	Indianapolis	IN	—	1,200	5,740	—		1,200	5,740	6,940	1,981	4,959	1985	2005	35 years
Elmcroft of Muncie	Muncie	IN	—	244	11,218	—		244	11,218	11,462	3,045	8,417	1998	2007	35 years
Wood Ridge	South Bend	IN	—	590	4,850	(35	)	590	4,815	5,405	922	4,483	1990	2011	35 years
Canford Healthcare Limited	Bexleyheath	KNT	—	5,042	7,525	(2,045	)	4,222	6,300	10,522	377	10,145	2007	2015	40 years
Canford Healthcare Limited	Maidstone	KNT	—	3,769	3,089	(1,116	)	3,155	2,587	5,742	244	5,498	2013	2015	40 years
Canford Healthcare Limited	Tunbridge Wells	KNT	—	4,323	5,869	(1,660	)	3,619	4,913	8,532	356	8,176	2010	2015	40 years
Elmcroft of Florence	Florence	KY	—	1,535	21,826	—		1,535	21,826	23,361	1,455	21,906	2010	2014	35 years
Hartland Hills	Lexington	KY	—	1,468	23,929	—		1,468	23,929	25,397	2,601	22,796	2001	2013	35 years
Elmcroft of Mount Washington	Mount Washington	KY	—	758	12,048	—		758	12,048	12,806	802	12,004	2005	2014	35 years
Heathlands Care Home	Chingford	LON	—	5,398	7,967	(2,176	)	4,519	6,670	11,189	408	10,781	1980	2015	40 years
Heritage Woods	Agawam	MA	—	1,249	4,625	—		1,249	4,625	5,874	2,266	3,608	1997	2004	30 years
Devonshire Estates	Lenox	MA	—	1,832	31,124	—		1,832	31,124	32,956	3,382	29,574	1998	2013	35 years
Outlook Pointe at Hagerstown	Hagerstown	MD	—	2,010	1,293	271		2,010	1,564	3,574	481	3,093	1999	2011	35 years
Clover Healthcare	Auburn	ME	—	1,400	26,895	876		1,400	27,771	29,171	5,108	24,063	1982	2011	35 years
Gorham House	Gorham	ME	—	1,360	33,147	1,472		1,527	34,452	35,979	5,809	30,170	1990	2011	35 years
Kittery Estates	Kittery	ME	—	1,531	30,811	—		1,531	30,811	32,342	3,344	28,998	2009	2013	35 years
Woods at Canco	Portland	ME	—	1,441	45,578	—		1,441	45,578	47,019	4,934	42,085	2000	2013	35 years
Sentry Hill	York Harbor	ME	—	3,490	19,869	—		3,490	19,869	23,359	3,479	19,880	2000	2011	35 years
Elmcroft of Downriver	Brownstown Charter Township	MI	—	320	32,652	429		371	33,030	33,401	5,678	27,723	2000	2011	35 years
Independence Village of East Lansing	East Lansing	MI	—	1,956	18,122	398		1,956	18,520	20,476	2,532	17,944	1989	2012	35 years
Elmcroft of Kentwood	Kentwood	MI	—	510	13,976	521		510	14,497	15,007	2,876	12,131	2001	2011	35 years
Primrose Austin	Austin	MN	—	2,540	11,707	443		2,540	12,150	14,690	2,002	12,688	2002	2011	35 years
Primrose Duluth	Duluth	MN	—	6,190	8,296	202		6,190	8,498	14,688	1,625	13,063	2003	2011	35 years
Primrose Mankato	Mankato	MN	—	1,860	8,920	223		1,860	9,143	11,003	1,670	9,333	1999	2011	35 years
Rose Arbor	Maple Grove	MN	—	1,140	12,421	—		1,140	12,421	13,561	5,165	8,396	2000	2006	35 years
Wildflower Lodge	Maple Grove	MN	—	504	5,035	—		504	5,035	5,539	2,098	3,441	1981	2006	35 years
Lodge at White Bear	White Bear Lake	MN	—	732	24,999	—		732	24,999	25,731	2,706	23,025	2002	2013	35 years
Assisted Living at the Meadowlands - O'Fallon	O'Fallon	MO	—	2,326	14,158	—		2,326	14,158	16,484	1,157	15,327	1999	2015	35 years
Canyon Creek Inn Memory Care	Billings	MT	—	420	11,217	7		420	11,224	11,644	1,877	9,767	2011	2011	35 years
Springs at Missoula	Missoula	MT	15,684	1,975	34,390	—		1,975	34,390	36,365	4,898	31,467	2004	2012	35 years
Carillon ALF of Asheboro	Asheboro	NC	—	680	15,370	—		680	15,370	16,050	2,667	13,383	1998	2011	35 years

165



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Arbor Terrace of Asheville	Asheville	NC	9,093	1,365	15,679	303	1,365	15,982	17,347	1,115	16,232	1998	2015	35 years
Elmcroft of Little Avenue	Charlotte	NC	—	250	5,077	—	250	5,077	5,327	1,475	3,852	1997	2006	35 years
Carillon ALF of Cramer Mt.	Cramerton	NC	—	530	18,225	—	530	18,225	18,755	3,189	15,566	1999	2011	35 years
Carillon ALF of Harrisburg	Harrisburg	NC	—	1,660	15,130	—	1,660	15,130	16,790	2,635	14,155	1997	2011	35 years
Carillon ALF of Hendersonville	Hendersonville	NC	—	2,210	7,372	—	2,210	7,372	9,582	1,449	8,133	2005	2011	35 years
Carillon ALF of Hillsborough	Hillsborough	NC	—	1,450	19,754	—	1,450	19,754	21,204	3,389	17,815	2005	2011	35 years
Willow Grove	Matthews	NC	—	763	27,544	—	763	27,544	28,307	2,980	25,327	2009	2013	35 years
Carillon ALF of Newton	Newton	NC	—	540	14,935	—	540	14,935	15,475	2,593	12,882	2000	2011	35 years
Independence Village of Olde Raleigh	Raleigh	NC	—	1,989	18,648	—	1,989	18,648	20,637	2,635	18,002	1991	2012	35 years
Elmcroft of Northridge	Raleigh	NC	—	184	3,592	—	184	3,592	3,776	1,043	2,733	1984	2006	35 years
Carillon ALF of Salisbury	Salisbury	NC	—	1,580	25,026	—	1,580	25,026	26,606	4,257	22,349	1999	2011	35 years
Carillon ALF of Shelby	Shelby	NC	—	660	15,471	—	660	15,471	16,131	2,694	13,437	2000	2011	35 years
Elmcroft of Southern Pines	Southern Pines	NC	—	1,196	10,766	—	1,196	10,766	11,962	2,076	9,886	1998	2010	35 years
Carillon ALF of Southport	Southport	NC	—	1,330	10,356	—	1,330	10,356	11,686	1,918	9,768	2005	2011	35 years
Primrose Bismarck	Bismarck	ND	—	1,210	9,768	130	1,210	9,898	11,108	1,731	9,377	1994	2011	35 years
Wellington ALF - Minot ND	Minot	ND	—	3,241	9,509	—	3,241	9,509	12,750	961	11,789	2005	2015	35 years
Crown Pointe	Omaha	NE	—	1,316	11,950	—	1,316	11,950	13,266	3,982	9,284	1985	2005	35 years
Birch Heights	Derry	NH	—	1,413	30,267	—	1,413	30,267	31,680	3,284	28,396	2009	2013	35 years
Bear Canyon Estates	Albuquerque	NM	—	1,879	36,223	—	1,879	36,223	38,102	3,932	34,170	1997	2013	35 years
The Woodmark at Uptown	Albuquerque	NM	—	2,439	33,276	203	2,445	33,473	35,918	2,237	33,681	2000	2015	35 years
Elmcroft of Quintessence	Albuquerque	NM	—	1,150	26,527	422	1,165	26,934	28,099	4,665	23,434	1998	2011	35 years
Prestige Assisted Living at Mira Loma	Henderson	NV	—	1,279	12,558	—	1,279	12,558	13,837	317	13,520	1998	2016	35 years
The Amberleigh	Buffalo	NY	—	3,498	19,097	5,059	3,498	24,156	27,654	6,529	21,125	1988	2005	35 years
Castle Gardens	Vestal	NY	—	1,830	20,312	2,230	1,885	22,487	24,372	4,793	19,579	1994	2011	35 years
Elmcroft of Lima	Lima	OH	—	490	3,368	—	490	3,368	3,858	978	2,880	1998	2006	35 years
Elmcroft of Ontario	Mansfield	OH	—	523	7,968	—	523	7,968	8,491	2,314	6,177	1998	2006	35 years
Elmcroft of Medina	Medina	OH	—	661	9,788	—	661	9,788	10,449	2,843	7,606	1999	2006	35 years
Elmcroft of Washington Township	Miamisburg	OH	—	1,235	12,611	—	1,235	12,611	13,846	3,663	10,183	1998	2006	35 years
Elmcroft of Sagamore Hills	Northfield	OH	—	980	12,604	—	980	12,604	13,584	3,661	9,923	2000	2006	35 years
Elmcroft of Lorain	Vermilion	OH	—	500	15,461	528	557	15,932	16,489	3,042	13,447	2000	2011	35 years
Gardens at Westlake - Westlake OH	Westlake	OH	—	2,401	20,640	65	2,401	20,705	23,106	1,537	21,569	1987	2015	35 years
Elmcroft of Xenia	Xenia	OH	—	653	2,801	—	653	2,801	3,454	814	2,640	1999	2006	35 years
Arbor House of Mustang	Mustang	OK	—	372	3,587	—	372	3,587	3,959	480	3,479	1999	2012	35 years
Arbor House of Norman	Norman	OK	—	444	7,525	—	444	7,525	7,969	1,001	6,968	2000	2012	35 years
Arbor House Reminisce Center	Norman	OK	—	438	3,028	—	438	3,028	3,466	407	3,059	2004	2012	35 years

166



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Arbor House of Midwest City	Oklahoma City	OK	—	544	9,133	—	544	9,133	9,677	1,215	8,462	2004	2012	25 years
Mansion at Waterford	Oklahoma City	OK	—	2,077	14,184	—	2,077	14,184	16,261	2,094	14,167	1999	2012	35 years
Meadowbrook Place	Baker City	OR	—	1,430	5,311	—	1,430	5,311	6,741	392	6,349	1965	2014	35 years
Edgewood Downs	Beaverton	OR	—	2,356	15,476	—	2,356	15,476	17,832	1,703	16,129	1978	2013	35 years
Princeton Village	Clackamas	OR	2,808	1,126	10,283	34	1,126	10,317	11,443	743	10,700	1999	2015	35 years
Bayside Terrace	Coos Bay	OR	—	498	2,795	590	498	3,385	3,883	323	3,560	2006	2015	35 years
Ocean Ridge	Coos Bay	OR	—	2,681	10,941	75	2,681	11,016	13,697	1,108	12,589	2006	2015	35 years
Avamere at Hillsboro	Hillsboro	OR	—	4,400	8,353	1,145	4,400	9,498	13,898	1,894	12,004	2000	2011	35 years
The Springs at Tanasbourne	Hillsboro	OR	34,002	4,689	55,035	—	4,689	55,035	59,724	7,766	51,958	2009	2013	35 years
Keizer River ALZ Facility	Keizer	OR	—	922	6,460	96	1,135	6,343	7,478	545	6,933	2012	2014	35 years
Pelican Pointe	Klamath Falls	OR	11,839	943	26,237	23	943	26,260	27,203	1,759	25,444	2011	2015	35 years
The Stafford	Lake Oswego	OR	—	1,800	16,122	180	1,806	16,296	18,102	3,002	15,100	2008	2011	35 years
The Springs at Clackamas Woods (ILF)	Milwaukie	OR	10,374	1,264	22,429	—	1,264	22,429	23,693	3,195	20,498	1999	2012	35 years
Clackamas Woods Assisted Living	Milwaukie	OR	5,550	681	12,077	—	681	12,077	12,758	1,721	11,037	1999	2012	35 years
Pheasant Pointe	Molalla	OR	—	904	7,433	6	904	7,439	8,343	579	7,764	1998	2015	35 years
Avamere at Newberg	Newberg	OR	—	1,320	4,664	485	1,320	5,149	6,469	1,106	5,363	1999	2011	35 years
Avamere Living at Berry Park	Oregon City	OR	—	1,910	4,249	2,224	1,910	6,473	8,383	1,399	6,984	1972	2011	35 years
McLoughlin Place Senior Living	Oregon City	OR	—	2,418	26,819	—	2,418	26,819	29,237	1,953	27,284	1997	2014	35 years
Avamere at Bethany	Portland	OR	—	3,150	16,740	95	3,150	16,835	19,985	3,076	16,909	2002	2011	35 years
Cedar Village	Salem	OR	—	868	12,652	159	868	12,811	13,679	885	12,794	1999	2015	35 years
Redwood Heights	Salem	OR	—	1,513	16,774	6	1,513	16,780	18,293	1,163	17,130	1999	2015	35 years
Avamere at Sandy	Sandy	OR	—	1,000	7,309	263	1,000	7,572	8,572	1,500	7,072	1999	2011	35 years
Suzanne Elise ALF	Seaside	OR	—	1,940	4,027	47	1,940	4,074	6,014	1,005	5,009	1998	2011	35 years
Necanicum Village	Seaside	OR	—	2,212	7,311	40	2,212	7,351	9,563	470	9,093	2001	2015	35 years
Avamere at Sherwood	Sherwood	OR	—	1,010	7,051	258	1,010	7,309	8,319	1,454	6,865	2000	2011	35 years
Chateau Gardens	Springfield	OR	—	1,550	4,197	—	1,550	4,197	5,747	751	4,996	1991	2011	35 years
Avamere at St Helens	St. Helens	OR	—	1,410	10,496	433	1,410	10,929	12,339	2,050	10,289	2000	2011	35 years
Flagstone Senior Living	The Dalles	OR	—	1,631	17,786	—	1,631	17,786	19,417	1,293	18,124	1991	2014	35 years
Elmcroft of Allison Park	Allison Park	PA	—	1,171	5,686	—	1,171	5,686	6,857	1,652	5,205	1986	2006	35 years
Elmcroft of Chippewa	Beaver Falls	PA	—	1,394	8,586	—	1,394	8,586	9,980	2,494	7,486	1998	2006	35 years
Elmcroft of Berwick	Berwick	PA	—	111	6,741	—	111	6,741	6,852	1,958	4,894	1998	2006	35 years
Outlook Pointe at Lakemont	Bridgeville	PA	—	1,660	12,624	203	1,660	12,827	14,487	2,408	12,079	1999	2011	35 years
Elmcroft of Dillsburg	Dillsburg	PA	—	432	7,797	—	432	7,797	8,229	2,265	5,964	1998	2006	35 years
Elmcroft of Altoona	Hollidaysburg	PA	—	331	4,729	—	331	4,729	5,060	1,374	3,686	1997	2006	35 years
Elmcroft of Lebanon	Lebanon	PA	—	240	7,336	—	240	7,336	7,576	2,131	5,445	1999	2006	35 years
Elmcroft of Lewisburg	Lewisburg	PA	—	232	5,666	—	232	5,666	5,898	1,646	4,252	1999	2006	35 years
Lehigh Commons	Macungie	PA	—	420	4,406	450	420	4,856	5,276	2,308	2,968	1997	2004	30 years

167



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Elmcroft of Loyalsock	Montoursville	PA	—	413	3,412	—	413	3,412	3,825	894	2,931	1999	2006	35 years
Highgate at Paoli Pointe	Paoli	PA	—	1,151	9,079	—	1,151	9,079	10,230	3,755	6,475	1997	2004	30 years
Elmcroft of Mid Valley	Peckville	PA	—	619	11,662	—	619	11,662	12,281	388	11,893	1998	2014	35 years
Sanatoga Court	Pottstown	PA	—	360	3,233	—	360	3,233	3,593	1,402	2,191	1997	2004	30 years
Berkshire Commons	Reading	PA	—	470	4,301	—	470	4,301	4,771	1,862	2,909	1997	2004	30 years
Mifflin Court	Reading	PA	—	689	4,265	351	689	4,616	5,305	1,728	3,577	1997	2004	35 years
Elmcroft of Reading	Reading	PA	—	638	4,942	—	638	4,942	5,580	1,294	4,286	1998	2006	35 years
Elmcroft of Reedsville	Reedsville	PA	—	189	5,170	—	189	5,170	5,359	1,354	4,005	1998	2006	35 years
Elmcroft of Saxonburg	Saxonburg	PA	—	770	5,949	—	770	5,949	6,719	1,558	5,161	1994	2006	35 years
Elmcroft of Shippensburg	Shippensburg	PA	—	203	7,634	—	203	7,634	7,837	1,999	5,838	1999	2006	35 years
Elmcroft of State College	State College	PA	—	320	7,407	—	320	7,407	7,727	1,940	5,787	1997	2006	35 years
Outlook Pointe at York	York	PA	—	1,260	6,923	85	1,260	7,008	8,268	1,092	7,176	1999	2011	35 years
Garden House of Anderson SC	Anderson	SC	7,871	969	15,613	—	969	15,613	16,582	510	16,072	2000	2015	35 years
Forest Pines	Columbia	SC	—	1,058	27,471	—	1,058	27,471	28,529	2,061	26,468	1998	2013	35 years
Elmcroft of Florence SC	Florence	SC	—	108	7,620	—	108	7,620	7,728	1,996	5,732	1998	2006	35 years
Primrose Aberdeen	Aberdeen	SD	—	850	659	72	850	731	1,581	231	1,350	1991	2011	35 years
Primrose Place	Aberdeen	SD	—	310	3,242	12	310	3,254	3,564	495	3,069	2000	2011	35 years
Primrose Rapid City	Rapid City	SD	—	860	8,722	—	860	8,722	9,582	1,322	8,260	1997	2011	35 years
Primrose Sioux Falls	Sioux Falls	SD	—	2,180	12,936	99	2,180	13,035	15,215	1,985	13,230	2002	2011	35 years
Ashridge Court	Bexhill-on-Sea	East Sussex	—	2,274	4,791	—	2,274	4,791	7,065	173	6,892	2010	2015	40 years
Inglewood Nursing Home	Eastbourne	East Sussex	—	1,908	3,021	—	1,908	3,021	4,929	126	4,803	2010	2015	40 years
Pentlow Nursing Home	Eastbourne	East Sussex	—	1,964	2,462	—	1,964	2,462	4,426	109	4,317	2007	2015	40 years
Outlook Pointe of Bristol	Bristol	TN	—	470	16,006	134	470	16,140	16,610	2,274	14,336	1999	2011	35 years
Elmcroft of Hamilton Place	Chattanooga	TN	—	87	4,248	—	87	4,248	4,335	1,112	3,223	1998	2006	35 years
Elmcroft of Shallowford	Chattanooga	TN	—	580	7,568	455	582	8,021	8,603	1,442	7,161	1999	2011	35 years
Elmcroft of Hendersonville	Hendersonville	TN	—	600	5,304	—	600	5,304	5,904	178	5,726	1999	2014	35 years
Regency House	Hixson	TN	—	140	6,611	—	140	6,611	6,751	982	5,769	2000	2011	35 years
Elmcroft of Jackson	Jackson	TN	—	768	16,840	—	768	16,840	17,608	559	17,049	1998	2014	35 years
Outlook Pointe at Johnson City	Johnson City	TN	—	590	10,043	222	590	10,265	10,855	1,472	9,383	1999	2011	35 years
Elmcroft of Kingsport	Kingsport	TN	—	22	7,815	—	22	7,815	7,837	2,047	5,790	2000	2006	35 years
Arbor Terrace of Knoxville	Knoxville	TN	—	590	15,862	—	590	15,862	16,452	527	15,925	1997	2015	35 years

168



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Elmcroft of Halls	Knoxville	TN	—	387	4,948	—		387	4,948	5,335	165	5,170	1998	2014	35 years
Elmcroft of West Knoxville	Knoxville	TN	—	439	10,697	—		439	10,697	11,136	2,802	8,334	2000	2006	35 years
Elmcroft of Lebanon	Lebanon	TN	—	180	7,086	—		180	7,086	7,266	1,856	5,410	2000	2006	35 years
Elmcroft of Bartlett	Memphis	TN	—	570	25,552	343		570	25,895	26,465	3,703	22,762	1999	2011	35 years
Kennington Place	Memphis	TN	—	1,820	4,748	815		1,820	5,563	7,383	1,276	6,107	1989	2011	35 years
Glenmary Senior Manor	Memphis	TN	—	510	5,860	224		510	6,084	6,594	1,245	5,349	1964	2011	35 years
Outlook Pointe at Murfreesboro	Murfreesboro	TN	—	940	8,030	259		940	8,289	9,229	1,233	7,996	1999	2011	35 years
Elmcroft of Brentwood	Nashville	TN	—	960	22,020	603		960	22,623	23,583	3,392	20,191	1998	2011	35 years
Elmcroft of Arlington	Arlington	TX	—	2,650	14,060	473		2,650	14,533	17,183	2,309	14,874	1998	2011	35 years
Meadowbrook ALZ	Arlington	TX	—	755	4,677	940		755	5,617	6,372	557	5,815	2012	2012	35 years
Elmcroft of Austin	Austin	TX	—	2,770	25,820	534		2,770	26,354	29,124	3,856	25,268	2000	2011	35 years
Elmcroft of Bedford	Bedford	TX	—	770	19,691	493		770	20,184	20,954	3,009	17,945	1999	2011	35 years
Highland Estates	Cedar Park	TX	—	1,679	28,943	—		1,679	28,943	30,622	2,177	28,445	2009	2013	35 years
Elmcroft of Rivershire	Conroe	TX	—	860	32,671	689		860	33,360	34,220	4,785	29,435	1997	2011	35 years
Flower Mound	Flower Mound	TX	—	900	5,512	—		900	5,512	6,412	831	5,581	1995	2011	35 years
Arbor House Granbury	Granbury	TX	—	390	8,186	—		390	8,186	8,576	816	7,760	2007	2012	35 years
Copperfield Estates	Houston	TX	—	1,216	21,135	—		1,216	21,135	22,351	1,590	20,761	2009	2013	35 years
Elmcroft of Braeswood	Houston	TX	—	3,970	15,919	626		3,970	16,545	20,515	2,586	17,929	1999	2011	35 years
Elmcroft of Cy-Fair	Houston	TX	—	1,580	21,801	419		1,593	22,207	23,800	3,250	20,550	1998	2011	35 years
Elmcroft of Irving	Irving	TX	—	1,620	18,755	455		1,620	19,210	20,830	2,874	17,956	1999	2011	35 years
Whitley Place	Keller	TX	—	—	5,100	—		—	5,100	5,100	1,154	3,946	1998	2008	35 years
Elmcroft of Lake Jackson	Lake Jackson	TX	—	710	14,765	417		710	15,182	15,892	2,318	13,574	1998	2011	35 years
Arbor House Lewisville	Lewisville	TX	—	824	10,308	—		824	10,308	11,132	1,031	10,101	2007	2012	35 years
Elmcroft of Vista Ridge	Lewisville	TX	—	6,280	10,548	(10,254	)	1,934	4,640	6,574	1,901	4,673	1998	2011	35 years
Polo Park Estates	Midland	TX	—	765	29,447	—		765	29,447	30,212	2,205	28,007	1996	2013	35 years
Arbor Hills Memory Care Community	Plano	TX	—	1,014	5,719	—		1,014	5,719	6,733	476	6,257	2013	2013	35 years
Arbor House of Rockwall	Rockwall	TX	—	1,537	12,883	—		1,537	12,883	14,420	1,296	13,124	2009	2012	35 years
Elmcroft of Windcrest	San Antonio	TX	—	920	13,011	526		920	13,537	14,457	2,176	12,281	1999	2011	35 years
Paradise Springs	Spring	TX	—	1,488	24,556	—		1,488	24,556	26,044	1,848	24,196	2008	2013	35 years
Arbor House of Temple	Temple	TX	—	473	6,750	—		473	6,750	7,223	675	6,548	2008	2012	35 years
Elmcroft of Cottonwood	Temple	TX	—	630	17,515	405		630	17,920	18,550	2,659	15,891	1997	2011	35 years
Elmcroft of Mainland	Texas City	TX	—	520	14,849	504		520	15,353	15,873	2,335	13,538	1996	2011	35 years
Elmcroft of Victoria	Victoria	TX	—	440	13,040	425		440	13,465	13,905	2,061	11,844	1997	2011	35 years

169



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Arbor House of Weatherford	Weatherford	TX	—	233	3,347	—		233	3,347	3,580	334	3,246	1994	2012	35 years
Elmcroft of Wharton	Wharton	TX	—	320	13,799	658		320	14,457	14,777	2,248	12,529	1996	2011	35 years
Mountain Ridge	South Ogden	UT	11,644	1,243	24,659	—		1,243	24,659	25,902	884	25,018	2001	2014	35 years
Elmcroft of Chesterfield	Richmond	VA	—	829	6,534	—		829	6,534	7,363	1,711	5,652	1999	2006	35 years
Pheasant Ridge	Roanoke	VA	—	1,813	9,027	—		1,813	9,027	10,840	1,037	9,803	1999	2012	35 years
Cascade Valley Senior Living	Arlington	WA	—	1,413	6,294	—		1,413	6,294	7,707	240	7,467	1995	2014	35 years
The Bellingham at Orchard	Bellingham	WA	—	3,383	17,553	—		3,383	17,553	20,936	543	20,393	1999	2015	35 years
Bay Pointe	Bremerton	WA	—	2,114	21,006	—		2,114	21,006	23,120	667	22,453	1999	2015	35 years
Cooks Hill Manor	Centralia	WA	—	520	6,144	21		520	6,165	6,685	996	5,689	1993	2011	35 years
Edmonds Landing	Edmonds	WA	—	4,273	27,852	—		4,273	27,852	32,125	815	31,310	2001	2015	35 years
Terrace at Beverly Lake	Everett	WA	—	1,515	12,520	—		1,515	12,520	14,035	380	13,655	1998	2015	35 years
The Sequoia	Olympia	WA	—	1,490	13,724	80		1,490	13,804	15,294	2,077	13,217	1995	2011	35 years
Bishop Place Senior Living	Pullman	WA	—	1,780	33,608	—		1,780	33,608	35,388	1,258	34,130	1998	2014	35 years
Willow Gardens	Puyallup	WA	—	1,959	35,492	—		1,959	35,492	37,451	2,669	34,782	1996	2013	35 years
Birchview	Sedro-Woolley	WA	—	210	14,145	95		210	14,240	14,450	1,957	12,493	1996	2011	35 years
Discovery Memory Care	Sequim	WA	—	320	10,544	45		320	10,589	10,909	1,534	9,375	1961	2011	35 years
The Village Retirement & Assisted Living	Tacoma	WA	—	2,200	5,938	90		2,200	6,028	8,228	1,193	7,035	1976	2011	35 years
Clearwater Springs	Vancouver	WA	—	1,269	9,840	—		1,269	9,840	11,109	369	10,740	2003	2015	35 years
Matthews of Appleton I	Appleton	WI	—	130	1,834	(41	)	130	1,793	1,923	291	1,632	1996	2011	35 years
Matthews of Appleton II	Appleton	WI	—	140	2,016	100		140	2,116	2,256	316	1,940	1997	2011	35 years
Hunters Ridge	Beaver Dam	WI	—	260	2,380	—		260	2,380	2,640	372	2,268	1998	2011	35 years
Harbor House Beloit	Beloit	WI	—	150	4,356	411		191	4,726	4,917	628	4,289	1990	2011	35 years
Harbor House Clinton	Clinton	WI	—	290	4,390	—		290	4,390	4,680	626	4,054	1991	2011	35 years
Creekside	Cudahy	WI	—	760	1,693	—		760	1,693	2,453	288	2,165	2001	2011	35 years
Harbor House Eau Claire	Eau Claire	WI	—	210	6,259	—		210	6,259	6,469	870	5,599	1996	2011	35 years
Chapel Valley	Fitchburg	WI	—	450	2,372	—		450	2,372	2,822	375	2,447	1998	2011	35 years
Matthews of Milwaukee II	Fox Point	WI	—	1,810	943	37		1,820	970	2,790	218	2,572	1999	2011	35 years
Laurel Oaks	Glendale	WI	—	2,390	43,587	594		2,390	44,181	46,571	6,199	40,372	1988	2011	35 years
Layton Terrace	Greenfield	WI	6,845	3,490	39,201	—		3,490	39,201	42,691	5,690	37,001	1999	2011	35 years
Matthews of Hartland	Hartland	WI	—	640	1,663	43		652	1,694	2,346	322	2,024	1985	2011	35 years
Matthews of Horicon	Horicon	WI	—	340	3,327	(95	)	345	3,227	3,572	564	3,008	2002	2011	35 years
Jefferson	Jefferson	WI	—	330	2,384	—		330	2,384	2,714	372	2,342	1997	2011	35 years

170



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Harbor House Kenosha	Kenosha	WI	—	710	3,254	2,793		1,156	5,601	6,757	531	6,226	1996	2011	35 years
Harbor House Manitowoc	Manitowoc	WI	—	140	1,520	—		140	1,520	1,660	229	1,431	1997	2011	35 years
Adare II	Menasha	WI	—	110	537	20		110	557	667	110	557	1994	2011	35 years
Adare IV	Menasha	WI	—	110	537	5		110	542	652	104	548	1994	2011	35 years
Adare III	Menasha	WI	—	90	557	5		90	562	652	111	541	1993	2011	35 years
Adare I	Menasha	WI	—	90	557	5		90	562	652	106	546	1993	2011	35 years
The Arboretum	Menomonee Falls	WI	—	5,640	49,083	583		5,640	49,666	55,306	7,389	47,917	1989	2011	35 years
Matthews of Milwaukee I	Milwaukee	WI	—	1,800	935	119		1,800	1,054	2,854	222	2,632	1999	2011	35 years
Hart Park Square	Milwaukee	WI	6,600	1,900	21,628	—		1,900	21,628	23,528	3,160	20,368	2005	2011	35 years
Harbor House Monroe	Monroe	WI	—	490	4,964	—		490	4,964	5,454	719	4,735	1990	2011	35 years
Matthews of Neenah I	Neenah	WI	—	710	1,157	64		713	1,218	1,931	240	1,691	2006	2011	35 years
Matthews of Neenah II	Neenah	WI	—	720	2,339	(50	)	720	2,289	3,009	403	2,606	2007	2011	35 years
Matthews of Irish Road	Neenah	WI	—	320	1,036	87		320	1,123	1,443	227	1,216	2001	2011	35 years
Matthews of Oak Creek	Oak Creek	WI	—	800	2,167	(2	)	812	2,153	2,965	360	2,605	1997	2011	35 years
Azura Memory Care of Oak Creek	Oak Creek	WI	—	300	897	—		300	897	1,197	—	1,197	CIP	CIP	CIP
Harbor House Oconomowoc	Oconomowoc	WI	—	400	1,596	—		400	1,596	1,996	—	1,996	2016	2015	35 years
Wilkinson Woods of Oconomowoc	Oconomowoc	WI	—	1,100	12,436	—		1,100	12,436	13,536	1,794	11,742	1992	2011	35 years
Harbor House Oshkosh	Oshkosh	WI	—	190	949	—		190	949	1,139	188	951	1993	2011	35 years
Matthews of Pewaukee	Waukesha	WI	—	1,180	4,124	206		1,197	4,313	5,510	741	4,769	2001	2011	35 years
Harbor House Sheboygan	Sheboygan	WI	—	1,060	6,208	—		1,060	6,208	7,268	879	6,389	1995	2011	35 years
Matthews of St. Francis I	St. Francis	WI	—	1,370	1,428	(113	)	1,389	1,296	2,685	260	2,425	2000	2011	35 years
Matthews of St. Francis II	St. Francis	WI	—	1,370	1,666	15		1,377	1,674	3,051	297	2,754	2000	2011	35 years
Howard Village of St. Francis	St. Francis	WI	4,800	2,320	17,232	—		2,320	17,232	19,552	2,576	16,976	2001	2011	35 years
Harbor House Stoughton	Stoughton	WI	—	450	3,191	—		450	3,191	3,641	500	3,141	1992	2011	35 years
Oak Hill Terrace	Waukesha	WI	4,835	2,040	40,298	—		2,040	40,298	42,338	5,864	36,474	1985	2011	35 years
Harbor House Rib Mountain	Wausau	WI	—	350	3,413	—		350	3,413	3,763	500	3,263	1997	2011	35 years
Library Square	West Allis	WI	5,150	1,160	23,714	—		1,160	23,714	24,874	3,455	21,419	1996	2011	35 years
Matthews of Wrightstown	Wrightstown	WI	—	140	376	12		140	388	528	110	418	1999	2011	35 years
Outlook Pointe at Teays Valley	Hurricane	WV	—	1,950	14,489	106		1,950	14,595	16,545	2,049	14,496	1999	2011	35 years

171



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Elmcroft of Martinsburg	Martinsburg	WV	—	248	8,320	—	248	8,320	8,568	2,179	6,389	1999	2006	35 years
Garden Square Assisted Living of Casper	Casper	WY	—	355	3,197	—	355	3,197	3,552	428	3,124	1996	2011	35 years
Whispering Chase	Cheyenne	WY	—	1,800	20,354	—	1,800	20,354	22,154	1,537	20,617	2008	2013	35 years
TOTAL FOR OTHER SENIORS HOUSING COMMUNITIES			151,722	498,781	4,419,361	33,810	488,490	4,463,462	4,951,952	700,909	4,251,043
TOTAL FOR SENIORS HOUSING COMMUNITIES			1,116,295	1,468,809	13,666,207	410,048	1,459,731	14,085,333	15,545,064	2,943,102	12,601,962
MEDICAL OFFICE BUILDINGS
St. Vincent's Medical Center East #46	Birmingham	AL	—	—	25,298	3,892	—	29,190	29,190	6,094	23,096	2005	2010	35 years
St. Vincent's Medical Center East #48	Birmingham	AL	—	—	12,698	418	—	13,116	13,116	2,801	10,315	1989	2010	35 years
St. Vincent's Medical Center East #52	Birmingham	AL	—	—	7,608	1,064	—	8,672	8,672	2,213	6,459	1985	2010	35 years
Crestwood Medical Pavilion	Huntsville	AL	4,134	625	16,178	76	625	16,254	16,879	2,626	14,253	1994	2011	35 years
Davita Dialysis - Marked Tree	Marked Tree	AR	—	179	1,580	—	179	1,580	1,759	60	1,699	2009	2015	35 years
West Valley Medical Center	Buckeye	AZ	—	3,348	5,233	—	3,348	5,233	8,581	243	8,338	2011	2015	31 years
Canyon Springs Medical Plaza	Gilbert	AZ	15,322	—	27,497	66	—	27,563	27,563	3,941	23,622	2007	2012	35 years
Mercy Gilbert Medical Plaza	Gilbert	AZ	7,620	720	11,277	559	720	11,836	12,556	2,207	10,349	2007	2011	35 years
Thunderbird Paseo Medical Plaza	Glendale	AZ	—	—	12,904	615	20	13,499	13,519	1,929	11,590	1997	2011	35 years
Thunderbird Paseo Medical Plaza II	Glendale	AZ	—	—	8,100	472	20	8,552	8,572	1,320	7,252	2001	2011	35 years
Desert Medical Pavilion	Mesa	AZ	—	—	32,768	129	—	32,897	32,897	2,905	29,992	2003	2013	35 years
Desert Samaritan Medical Building I	Mesa	AZ	—	—	11,923	516	—	12,439	12,439	1,758	10,681	1977	2011	35 years
Desert Samaritan Medical Building II	Mesa	AZ	—	—	7,395	101	—	7,496	7,496	1,179	6,317	1980	2011	35 years
Desert Samaritan Medical Building III	Mesa	AZ	—	—	13,665	1,043	—	14,708	14,708	2,093	12,615	1986	2011	35 years
Deer Valley Medical Office Building II	Phoenix	AZ	12,919	—	22,663	589	14	23,238	23,252	3,323	19,929	2002	2011	35 years
Deer Valley Medical Office Building III	Phoenix	AZ	10,649	—	19,521	30	12	19,539	19,551	2,813	16,738	2009	2011	35 years
Papago Medical Park	Phoenix	AZ	—	—	12,172	826	—	12,998	12,998	2,070	10,928	1989	2011	35 years

172



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
North Valley Orthopedic Surgery Center	Phoenix	AZ	—	2,800	10,150	—		2,800	10,150	12,950	354	12,596	2006	2015	35 years
Burbank Medical Plaza	Burbank	CA	—	1,241	23,322	1,037		1,241	24,359	25,600	4,242	21,358	2004	2011	35 years
Burbank Medical Plaza II	Burbank	CA	34,380	491	45,641	482		491	46,123	46,614	6,767	39,847	2008	2011	35 years
Eden Medical Plaza	Castro Valley	CA	—	258	2,455	315		258	2,770	3,028	758	2,270	1998	2011	25 years
Sutter Medical Center	San Diego	CA	—	—	25,088	1,382		—	26,470	26,459	2,301	24,158	2012	2012	35 years
United Healthcare - Cypress	Cypress	CA	—	12,883	38,309	—		12,883	38,309	51,192	1,701	49,491	1985	2015	29 years
NorthBay Corporate Headquarters	Fairfield	CA	—	—	19,187	—		—	19,187	19,187	1,837	17,350	2008	2012	35 years
Gateway Medical Plaza	Fairfield	CA	—	—	12,872	47		—	12,919	12,919	1,230	11,689	1986	2012	35 years
Solano NorthBay Health Plaza	Fairfield	CA	—	—	8,880	22		—	8,902	8,902	843	8,059	1990	2012	35 years
NorthBay Healthcare MOB	Fairfield	CA	—	—	8,507	2,280		—	10,787	10,787	997	9,790	2014	2013	35 years
UC Davis Medical	Folsom	CA	—	1,873	10,156	—		1,873	10,156	12,029	385	11,644	1995	2015	35 years
Verdugo Hills Professional Bldg I	Glendale	CA	—	6,683	9,589	849		6,683	10,438	17,121	2,305	14,816	1972	2012	23 years
Verdugo Hills Professional Bldg II	Glendale	CA	—	4,464	3,731	1,839		4,464	5,570	10,034	1,270	8,764	1987	2012	19 years
Grossmont Medical Terrace	La Mesa	CA	—	88	14,192	—		88	14,192	14,280	2,346	11,934	2008	2016	35 years
St. Francis Lynwood Medical	Lynwood	CA	—	688	8,385	1,272		688	9,657	10,345	2,346	7,999	1993	2011	32 years
PMB Mission Hills	Mission Hills	CA	—	15,468	30,116	4,729		15,468	34,845	50,313	3,095	47,218	2012	2012	35 years
PDP Mission Viejo	Mission Viejo	CA	57,439	1,916	77,022	665		1,916	77,687	79,603	11,775	67,828	2007	2011	35 years
PDP Orange	Orange	CA	45,723	1,752	61,647	335		1,761	61,973	63,734	9,680	54,054	2008	2011	35 years
NHP/PMB Pasadena	Pasadena	CA	—	3,138	83,412	9,026		3,138	92,438	95,576	16,041	79,535	2009	2011	35 years
Western University of Health Sciences Medical Pavilion	Pomona	CA	—	91	31,523	—		91	31,523	31,614	4,532	27,082	2009	2011	35 years
Pomerado Outpatient Pavilion	Poway	CA	—	3,233	71,435	2,964		3,233	74,399	77,632	12,439	65,193	2007	2011	35 years
Sutter Van Ness	San Francisco	CA	—	—	18,334	—		—	18,334	18,334	2,301	16,033	2012	2012	35 years
San Gabriel Valley Medical	San Gabriel	CA	—	914	5,510	671		914	6,181	7,095	1,467	5,628	2004	2011	35 years
Santa Clarita Valley Medical	Santa Clarita	CA	22,642	9,708	20,020	592		9,726	20,594	30,320	3,496	26,824	2005	2011	35 years
Kenneth E Watts Medical Plaza	Torrance	CA	—	262	6,945	1,915		291	8,831	9,122	2,095	7,027	1989	2011	23 years
Vaca Valley Health Plaza	Vacaville	CA	—	—	9,634	18		—	9,652	9,652	912	8,740	1988	2012	35 years
Potomac Medical Plaza	Aurora	CO	—	2,401	9,118	2,650		2,530	11,639	14,169	4,720	9,449	1986	2007	35 years
Briargate Medical Campus	Colorado Springs	CO	—	1,238	12,301	358		1,244	12,653	13,897	3,987	9,910	2002	2007	35 years
Printers Park Medical Plaza	Colorado Springs	CO	—	2,641	47,507	1,634		2,641	49,141	51,782	15,033	36,749	1999	2007	35 years
Green Valley Ranch MOB	Denver	CO	5,646	—	12,139	263		235	12,167	12,402	1,110	11,292	2007	2012	35 years
Community Physicians Pavilion	Lafayette	CO	—	—	10,436	1,729		—	12,165	12,165	2,517	9,648	2004	2010	35 years
Exempla Good Samaritan Medical Center	Lafayette	CO	—	—	4,393	(75	)	—	4,318	4,318	257	4,061	2013	2013	35 years
Dakota Ridge	Littleton	CO	—	2,540	12,901	55		2,540	12,956	15,496	458	15,038	2007	2015	35 years
Avista Two Medical Plaza	Louisville	CO	—	—	17,330	1,793		—	19,123	19,123	4,813	14,310	2003	2009	35 years

173



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
The Sierra Medical Building	Parker	CO	—	1,444	14,059	3,070	1,492	17,081	18,573	4,969	13,604	2009	2009	35 years
Crown Point Healthcare Plaza	Parker	CO	—	852	5,210	7	852	5,217	6,069	477	5,592	2008	2013	35 years
Lutheran Medical Office Building II	Wheat Ridge	CO	—	—	2,655	1,117	—	3,772	3,772	984	2,788	1976	2010	35 years
Lutheran Medical Office Building IV	Wheat Ridge	CO	—	—	7,266	1,514	—	8,780	8,780	1,827	6,953	1991	2010	35 years
Lutheran Medical Office Building III	Wheat Ridge	CO	—	—	11,947	163	—	12,110	12,110	2,576	9,534	2004	2010	35 years
DePaul Professional Office Building	Washington	DC	—	—	6,424	2,084	—	8,508	8,508	2,540	5,968	1987	2010	35 years
Providence Medical Office Building	Washington	DC	—	—	2,473	665	—	3,138	3,138	1,081	2,057	1975	2010	35 years
RTS Arcadia	Arcadia	FL	—	345	2,884	—	345	2,884	3,229	533	2,696	1993	2011	30 years
Aventura Medical Plaza	Aventura	FL	—	401	3,338	13	401	3,351	3,752	256	3,496	1996	2015	26 years
RTS Cape Coral	Cape Coral	FL	—	368	5,448	—	368	5,448	5,816	851	4,965	1984	2011	34 years
RTS Englewood	Englewood	FL	—	1,071	3,516	—	1,071	3,516	4,587	589	3,998	1992	2011	35 years
RTS Ft. Myers	Fort Myers	FL	—	1,153	4,127	—	1,153	4,127	5,280	773	4,507	1989	2011	31 years
RTS Key West	Key West	FL	—	486	4,380	—	486	4,380	4,866	609	4,257	1987	2011	35 years
JFK Medical Plaza	Lake Worth	FL	—	453	1,711	151	453	1,862	2,315	691	1,624	1999	2004	35 years
East Pointe Medical Plaza	Leigh Acres	FL	5,260	327	11,816	—	327	11,816	12,143	380	11,763	1994	2015	35 years
Palms West Building 6	Loxahatchee	FL	—	965	2,678	116	965	2,794	3,759	909	2,850	2000	2004	35 years
Bay Medical Plaza	Lynn Haven	FL	9,579	4,215	15,041	—	4,215	15,041	19,256	557	18,699	2003	2015	35 years
Aventura Heart & Health	Miami	FL	15,362	—	25,361	2,965	—	28,326	28,326	9,914	18,412	2006	2007	35 years
RTS Naples	Naples	FL	—	1,152	3,726	—	1,152	3,726	4,878	589	4,289	1999	2011	35 years
Bay Medical Center	Panama City	FL	9,321	82	17,400	—	82	17,400	17,482	559	16,923	1987	2015	35 years
Woodlands Center for Specialized Med	Pensacola	FL	14,508	2,518	24,006	29	2,518	24,035	26,553	3,513	23,040	2009	2012	35 years
RTS Pt. Charlotte	Pt Charlotte	FL	—	966	4,581	—	966	4,581	5,547	760	4,787	1985	2011	34 years
RTS Sarasota	Sarasota	FL	—	1,914	3,889	—	1,914	3,889	5,803	680	5,123	1996	2011	35 years
Capital Regional MOB I	Tallahassee	FL	—	590	8,773	—	590	8,773	9,363	251	9,112	1998	2015	35 years
University Medical Office Building	Tamarac	FL	—	—	6,690	392	5	7,077	7,082	2,316	4,766	2006	2007	35 years
RTS Venice	Venice	FL	—	1,536	4,104	—	1,536	4,104	5,640	690	4,950	1997	2011	35 years
Athens Medical Complex	Athens	GA	—	2,826	18,339	6	2,826	18,345	21,171	625	20,546	2011	2015	35 years
Doctors Center at St. Joseph’s Hospital	Atlanta	GA	—	545	80,152	2,558	545	82,710	83,255	740	82,515	1978	2015	20 years
Augusta POB I	Augusta	GA	—	233	7,894	927	233	8,821	9,054	2,971	6,083	1978	2012	14 years
Augusta POB II	Augusta	GA	—	735	13,717	260	735	13,977	14,712	3,446	11,266	1987	2012	23 years
Augusta POB III	Augusta	GA	—	535	3,857	316	535	4,173	4,708	1,192	3,516	1994	2012	22 years
Augusta POB IV	Augusta	GA	—	675	2,182	886	675	3,068	3,743	942	2,801	1995	2012	23 years
Cobb Physicians Center	Austell	GA	—	1,145	16,805	1,096	1,145	17,901	19,046	3,691	15,355	1992	2011	35 years
Summit Professional Plaza I	Brunswick	GA	5,096	1,821	2,974	107	1,821	3,081	4,902	2,669	2,233	2004	2012	31 years

174



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Summit Professional Plaza II	Brunswick	GA	10,829	981	13,818	32	981	13,850	14,831	2,378	12,453	1998	2012	35 years
Fayette MOB	Fayetteville	GA	—	895	20,669	178	895	20,847	21,742	672	21,070	2004	2015	35 years
Northside East Cobb - 1121	Marietta	GA	—	5,495	16,028	127	5,540	16,110	21,650	590	21,060	1991	2015	35 years
PAPP Clinic	Newnan	GA	—	2,167	5,477	68	2,167	5,545	7,712	253	7,459	1994	2015	30 years
Parkway Physicians Center	Ringgold	GA	—	476	10,017	661	476	10,678	11,154	2,047	9,107	2004	2011	35 years
Riverdale MOB	Riverdale	GA	—	1,025	9,783	—	1,025	9,783	10,808	365	10,443	2005	2015	35 years
Rush Copley POB I	Aurora	IL	—	120	27,882	84	120	27,966	28,086	907	27,179	1996	2015	34 years
Rush Copley POB II	Aurora	IL	—	49	27,217	267	49	27,484	27,533	859	26,674	2009	2015	35 years
Good Shepherd Physician Office Building I	Barrington	IL	—	152	3,224	207	152	3,431	3,583	274	3,309	1979	2013	35 years
Good Shepherd Physician Office Building II	Barrington	IL	—	512	12,977	373	512	13,350	13,862	1,129	12,733	1996	2013	35 years
Trinity Hospital Physician Office Building	Chicago	IL	—	139	3,329	432	139	3,761	3,900	328	3,572	1971	2013	35 years
Advocate Beverly Center	Chicago	IL	—	2,227	10,140	67	2,231	10,203	12,434	495	11,939	1986	2015	25 years
Crystal Lakes Medical Arts	Crystal Lake	IL	—	2,490	19,504	33	2,523	19,504	22,027	702	21,325	2007	2015	35 years
Advocate Good Shepard	Crystal Lake	IL	—	2,444	10,953	5	2,444	10,958	13,402	456	12,946	2008	2015	33 years
Physicians Plaza East	Decatur	IL	—	—	791	696	—	1,487	1,487	596	891	1976	2010	35 years
Physicians Plaza West	Decatur	IL	—	—	1,943	544	—	2,487	2,487	760	1,727	1987	2010	35 years
Kenwood Medical Center	Decatur	IL	—	—	3,900	2,957	—	6,857	6,857	1,252	5,605	1996	2010	35 years
304 W Hay Building	Decatur	IL	—	—	8,702	337	—	9,039	9,039	2,115	6,924	2002	2010	35 years
302 W Hay Building	Decatur	IL	—	—	3,467	388	—	3,855	3,855	1,147	2,708	1993	2010	35 years
ENTA	Decatur	IL	—	—	1,150	—	—	1,150	1,150	304	846	1996	2010	35 years
301 W Hay Building	Decatur	IL	—	—	640	—	—	640	640	234	406	1980	2010	35 years
South Shore Medical Building	Decatur	IL	—	902	129	—	902	129	1,031	145	886	1991	2010	35 years
SIU Family Practice	Decatur	IL	—	—	1,689	1,381	—	3,070	3,070	457	2,613	1997	2010	35 years
Corporate Health Services	Decatur	IL	—	934	1,386	—	934	1,386	2,320	450	1,870	1996	2010	35 years
Rock Springs Medical	Decatur	IL	—	399	495	—	399	495	894	171	723	1990	2010	35 years
575 W Hay Building	Decatur	IL	—	111	739	—	111	739	850	215	635	1984	2010	35 years
Good Samaritan Physician Office Building I	Downers Grove	IL	—	407	10,337	419	407	10,756	11,163	886	10,277	1976	2013	35 years
Good Samaritan Physician Office Building II	Downers Grove	IL	—	1,013	25,370	527	1,013	25,897	26,910	2,133	24,777	1995	2013	35 years
Eberle Medical Office Building ("Eberle MOB")	Elk Grove Village	IL	—	—	16,315	287	—	16,602	16,602	5,453	11,149	2005	2009	35 years
1425 Hunt Club Road MOB	Gurnee	IL	—	249	1,452	90	249	1,542	1,791	419	1,372	2005	2011	34 years
1445 Hunt Club Drive	Gurnee	IL	—	216	1,405	353	216	1,758	1,974	588	1,386	2002	2011	31 years
Gurnee Imaging Center	Gurnee	IL	—	82	2,731	—	82	2,731	2,813	453	2,360	2002	2011	35 years
Gurnee Center Club	Gurnee	IL	—	627	17,851	—	627	17,851	18,478	3,113	15,365	2001	2011	35 years
South Suburban Hospital Physician Office Building	Hazel Crest	IL	—	191	4,370	165	191	4,535	4,726	427	4,299	1989	2013	35 years

175



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Doctors Office Building III ("DOB III")	Hoffman Estates	IL	—	—	24,550	140	—	24,690	24,690	7,117	17,573	2005	2009	35 years
755 Milwaukee MOB	Libertyville	IL	—	421	3,716	1,248	630	4,755	5,385	1,822	3,563	1990	2011	18 years
890 Professional MOB	Libertyville	IL	—	214	2,630	194	214	2,824	3,038	707	2,331	1980	2011	26 years
Libertyville Center Club	Libertyville	IL	—	1,020	17,176	—	1,020	17,176	18,196	3,077	15,119	1988	2011	35 years
Christ Medical Center Physician Office Building	Oak Lawn	IL	—	658	16,421	634	658	17,055	17,713	1,374	16,339	1986	2013	35 years
Methodist North MOB	Peoria	IL	—	1,025	29,493	—	1,025	29,493	30,518	964	29,554	2010	2015	35 years
Davita Dialysis - Rockford	Rockford	IL	—	256	2,543	—	256	2,543	2,799	98	2,701	2009	2015	35 years
Round Lake ACC	Round Lake	IL	—	758	370	378	799	707	1,506	373	1,133	1984	2011	13 years
Vernon Hills Acute Care Center	Vernon Hills	IL	—	3,376	694	252	3,413	909	4,322	469	3,853	1986	2011	15 years
Wilbur S. Roby Building	Anderson	IN	—	—	2,653	875	—	3,528	3,528	971	2,557	1992	2010	35 years
Ambulatory Services Building	Anderson	IN	—	—	4,266	1,371	—	5,637	5,637	1,664	3,973	1995	2010	35 years
St. John's Medical Arts Building	Anderson	IN	—	—	2,281	835	—	3,116	3,116	823	2,293	1973	2010	35 years
Carmel I	Carmel	IN	—	466	5,954	258	466	6,212	6,678	1,149	5,529	1985	2012	30 years
Carmel II	Carmel	IN	—	455	5,976	597	455	6,573	7,028	1,042	5,986	1989	2012	33 years
Carmel III	Carmel	IN	—	422	6,194	424	422	6,618	7,040	960	6,080	2001	2012	35 years
Elkhart	Elkhart	IN	—	1,256	1,973	—	1,256	1,973	3,229	769	2,460	1994	2011	32 years
Lutheran Medical Arts	Fort Wayne	IN	—	702	13,576	30	702	13,606	14,308	469	13,839	2000	2015	35 years
Dupont Road MOB	Fort Wayne	IN	—	633	13,479	39	633	13,518	14,151	501	13,650	2001	2015	35 years
Harcourt Professional Office Building	Indianapolis	IN	—	519	28,951	1,527	519	30,478	30,997	5,209	25,788	1973	2012	28 years
Cardiac Professional Office Building	Indianapolis	IN	—	498	27,430	810	498	28,240	28,738	3,939	24,799	1995	2012	35 years
Oncology Medical Office Building	Indianapolis	IN	—	470	5,703	230	470	5,933	6,403	1,053	5,350	2003	2012	35 years
CorVasc Medical Office Building	Indianapolis	IN	—	514	9,617	—	514	9,617	10,131	1,053	9,078	2004	2016	36 years
St. Francis South Medical Office Building	Indianapolis	IN	—	—	20,649	831	—	21,480	21,480	2,081	19,399	1995	2013	35 years
Methodist Professional Center I	Indianapolis	IN	—	61	37,411	3,679	61	41,090	41,151	6,795	34,356	1985	2012	25 years
Indiana Orthopedic Center of Excellence	Indianapolis	IN	—	967	83,746	1,049	967	84,795	85,762	1,273	84,489	1997	2015	35 years
United Healthcare - Indy	Indianapolis	IN	—	5,737	32,116	—	5,737	32,116	37,853	1,131	36,722	1988	2015	35 years
LaPorte	La Porte	IN	—	553	1,309	—	553	1,309	1,862	331	1,531	1997	2011	34 years
Mishawaka	Mishawaka	IN	—	3,787	5,543	—	3,787	5,543	9,330	2,244	7,086	1993	2011	35 years
Cancer Care Partners	Mishawaka	IN	—	3,162	28,633	—	3,162	28,633	31,795	914	30,881	2010	2015	35 years
Michiana Oncology	Mishawaka	IN	—	4,577	20,939	—	4,577	20,939	25,516	700	24,816	2010	2015	35 years
DaVita Dialysis - Paoli	Paoli	IN	—	396	2,056	—	396	2,056	2,452	81	2,371	2011	2015	35 years
South Bend	South Bend	IN	—	792	2,530	—	792	2,530	3,322	530	2,792	1996	2011	34 years

176



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Via Christi Clinic	Wichita	KS	—	1,883	7,428	—		1,883	7,428	9,311	290	9,021	2006	2015	35 years
OLBH Same Day Surgery Center MOB	Ashland	KY	—	101	19,066	469		101	19,535	19,636	3,262	16,374	1997	2012	26 years
St. Elizabeth Covington	Covington	KY	—	345	12,790	(16	)	345	12,774	13,119	1,865	11,254	2009	2012	35 years
St. Elizabeth Florence MOB	Florence	KY	—	402	8,279	1,402		402	9,681	10,083	1,713	8,370	2005	2012	35 years
Jefferson Clinic	Louisville	KY	—	—	673	2,018		—	2,691	2,691	109	2,582	2013	2013	35 years
East Jefferson Medical Plaza	Metairie	LA	—	168	17,264	684		168	17,948	18,116	3,974	14,142	1996	2012	32 years
East Jefferson MOB	Metairie	LA	—	107	15,137	714		107	15,851	15,958	3,341	12,617	1985	2012	28 years
Lakeside POB I	Metairie	LA	—	3,334	4,974	2,939		3,334	7,913	11,247	2,090	9,157	1986	2011	22 years
Lakeside POB II	Metairie	LA	—	1,046	802	749		1,046	1,551	2,597	642	1,955	1980	2011	7 years
Fresenius Medical	Metairie	LA	—	1,195	3,797	—		1,195	3,797	4,992	134	4,858	2012	2015	35 years
RTS Berlin	Berlin	MD	—	—	2,216	—		—	2,216	2,216	378	1,838	1994	2011	29 years
Charles O. Fisher Medical Building	Westminster	MD	11,175	—	13,795	1,768		—	15,563	15,563	4,786	10,777	2009	2009	35 years
Medical Specialties Building	Kalamazoo	MI	—	—	19,242	1,481		—	20,723	20,723	4,234	16,489	1989	2010	35 years
North Professional Building	Kalamazoo	MI	—	—	7,228	1,622		—	8,850	8,850	1,786	7,064	1983	2010	35 years
Borgess Navigation Center	Kalamazoo	MI	—	—	2,391	—		—	2,391	2,391	570	1,821	1976	2010	35 years
Borgess Health & Fitness Center	Kalamazoo	MI	—	—	11,959	603		—	12,562	12,562	2,887	9,675	1984	2010	35 years
Heart Center Building	Kalamazoo	MI	—	—	8,420	421		10	8,831	8,841	2,207	6,634	1980	2010	35 years
Medical Commons Building	Kalamazoo Township	MI	—	—	661	574		—	1,235	1,235	199	1,036	1979	2010	35 years
RTS Madison Heights	Madison Heights	MI	—	401	2,946	—		401	2,946	3,347	483	2,864	2002	2011	35 years
RTS Monroe	Monroe	MI	—	281	3,450	—		281	3,450	3,731	635	3,096	1997	2011	31 years
Bronson Lakeview OPC	Paw Paw	MI	—	3,835	31,564	—		3,835	31,564	35,399	1,141	34,258	2006	2015	35 years
Pro Med Center Plainwell	Plainwell	MI	—	—	697	7		—	704	704	185	519	1991	2010	35 years
Pro Med Center Richland	Richland	MI	—	233	2,267	77		233	2,344	2,577	520	2,057	1996	2010	35 years
Henry Ford Dialysis Center	Southfield	MI	—	589	3,350	—		589	3,350	3,939	120	3,819	2002	2015	35 years
Metro Health	Wyoming	MI	—	1,325	5,479	—		1,325	5,479	6,804	207	6,597	2008	2015	35 years
Spectrum Health	Wyoming	MI	—	2,463	14,353	—		2,463	14,353	16,816	543	16,273	2006	2015	35 years
Cogdell Duluth MOB	Duluth	MN	—	—	33,406	(19	)	—	33,387	33,387	3,254	30,133	2012	2012	35 years
Allina Health	Elk River	MN	—	1,442	7,742	54		1,442	7,796	9,238	267	8,971	2002	2015	35 years
Unitron Hearing	Plymouth	MN	4,000	2,646	8,962	—		2,646	8,962	11,608	475	11,133	2011	2015	29 years
HealthPartners Medical & Dental Clinics	Sartell	MN	—	2,492	15,694	49		2,503	15,732	18,235	2,493	15,742	2010	2012	35 years
Arnold Urgent Care	Arnold	MO	—	1,058	556	95		1,097	612	1,709	365	1,344	1999	2011	35 years
DePaul Health Center North	Bridgeton	MO	—	996	10,045	1,651		996	11,696	12,692	2,542	10,150	1976	2012	21 years
DePaul Health Center South	Bridgeton	MO	—	910	12,169	1,135		910	13,304	14,214	2,374	11,840	1992	2012	30 years
St. Mary's Health Center MOB D	Clayton	MO	—	103	2,780	826		103	3,606	3,709	852	2,857	1984	2012	22 years
Fenton Urgent Care Center	Fenton	MO	—	183	2,714	245		189	2,953	3,142	738	2,404	2003	2011	35 years

177



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
St. Joseph Medical Building	Kansas City	MO	—	305	7,445	2,209		305	9,654	9,959	1,212	8,747	1988	2012	32 years
St. Joseph Medical Mall	Kansas City	MO	—	530	9,115	430		530	9,545	10,075	1,516	8,559	1995	2012	33 years
Carondelet Medical Building	Kansas City	MO	—	745	12,437	956		745	13,393	14,138	2,256	11,882	1979	2012	29 years
St. Joseph Hospital West Medical Office Building II	Lake Saint Louis	MO	—	524	3,229	294		524	3,523	4,047	659	3,388	2005	2012	35 years
St. Joseph O'Fallon Medical Office Building	O'Fallon	MO	—	940	5,556	16		945	5,567	6,512	839	5,673	1992	2012	35 years
Sisters of Mercy Building	Springfield	MO	5,500	3,427	8,697	—		3,427	8,697	12,124	350	11,774	2008	2015	35 years
St. Joseph Health Center Medical Building 1	St. Charles	MO	—	503	4,336	654		503	4,990	5,493	1,227	4,266	1987	2012	20 years
St. Joseph Health Center Medical Building 2	St. Charles	MO	—	369	2,963	538		369	3,501	3,870	650	3,220	1999	2012	32 years
Physicians Office Center	St. Louis	MO	—	1,445	13,825	911		1,445	14,736	16,181	3,678	12,503	2003	2011	35 years
12700 Southford Road Medical Plaza	St. Louis	MO	—	595	12,584	1,213		595	13,797	14,392	3,392	11,000	1993	2011	32 years
St Anthony's MOB A	St. Louis	MO	—	409	4,687	1,045		409	5,732	6,141	1,592	4,549	1975	2011	20 years
St Anthony's MOB B	St. Louis	MO	—	350	3,942	622		350	4,564	4,914	1,515	3,399	1980	2011	21 years
Lemay Urgent Care Center	St. Louis	MO	—	2,317	3,120	460		2,351	3,546	5,897	1,261	4,636	1983	2011	22 years
St. Mary's Health Center MOB B	St. Louis	MO	—	119	4,161	8,750		119	12,911	13,030	1,046	11,984	1979	2012	23 years
St. Mary's Health Center MOB C	St. Louis	MO	—	136	6,018	647		136	6,665	6,801	1,263	5,538	1969	2012	20 years
University Physicians - Grants Ferry	Flowood	MS	9,085	2,796	12,125	(13	)	2,796	12,112	14,908	1,922	12,986	2010	2012	35 years
Randolph	Charlotte	NC	—	6,370	2,929	1,196		6,370	4,125	10,495	2,550	7,945	1973	2012	4 years
Mallard Crossing I	Charlotte	NC	—	3,229	2,072	532		3,269	2,564	5,833	1,140	4,693	1997	2012	25 years
Medical Arts Building	Concord	NC	—	701	11,734	772		701	12,506	13,207	2,689	10,518	1997	2012	31 years
Gateway Medical Office Building	Concord	NC	—	1,100	9,904	622		1,100	10,526	11,626	2,249	9,377	2005	2012	35 years
Copperfield Medical Mall	Concord	NC	—	1,980	2,846	310		1,998	3,138	5,136	919	4,217	1989	2012	25 years
Weddington Internal & Pediatric Medicine	Concord	NC	—	574	688	22		574	710	1,284	213	1,071	2000	2012	27 years
Rex Wellness Center	Garner	NC	—	1,348	5,330	34		1,348	5,364	6,712	249	6,463	2003	2015	34 years
Gaston Professional Center	Gastonia	NC	—	833	24,885	752		833	25,637	26,470	3,993	22,477	1997	2012	35 years
Harrisburg Family Physicians	Harrisburg	NC	—	679	1,646	48		679	1,694	2,373	290	2,083	1996	2012	35 years
Harrisburg Medical Mall	Harrisburg	NC	—	1,339	2,292	237		1,339	2,529	3,868	749	3,119	1997	2012	27 years
Birkdale	Huntersville	NC	—	4,271	7,206	326		4,303	7,500	11,803	1,774	10,029	1997	2012	35 years
Birkdale II	Huntersville	NC	—	—	—	31		4	27	31	5	26	2001	2012	35 years
Northcross	Huntersville	NC	—	623	278	57		623	335	958	177	781	1993	2012	22 years
REX Knightdale MOB & Wellness Center	Knightdale	NC	—	—	22,823	467		—	23,290	23,290	2,156	21,134	2009	2012	35 years
Midland Medical Park	Midland	NC	—	1,221	847	71		1,221	918	2,139	370	1,769	1998	2012	25 years
East Rocky Mount Kidney Center	Rocky Mount	NC	—	803	998	(2	)	803	996	1,799	274	1,525	2000	2012	33 years

178



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Rocky Mount Kidney Center	Rocky Mount	NC	—	479	1,297	39		479	1,336	1,815	446	1,369	1990	2012	25 years
Rocky Mount Medical Park	Rocky Mount	NC	—	2,552	7,779	1,409		2,652	9,088	11,740	2,219	9,521	1991	2012	30 years
English Road Medical Center	Rocky Mount	NC	4,097	1,321	3,747	8		1,321	3,755	5,076	1,179	3,897	2002	2012	35 years
Rowan Outpatient Surgery Center	Salisbury	NC	—	1,039	5,184	(5	)	1,039	5,179	6,218	1,093	5,125	2003	2012	35 years
Trinity Health Medical Arts Clinic	Minot	ND	—	935	15,482	49		951	15,515	16,466	1,507	14,959	1995	2015	26 years
Cooper Health MOB I	Willingboro	NJ	—	1,389	2,742	(13	)	1,389	2,729	4,118	272	3,846	2010	2015	35 years
Cooper Health MOB II	Willingboro	NJ	—	594	5,638	—		594	5,638	6,232	397	5,835	2012	2015	35 years
Salem Medical	Woodstown	NJ	—	275	4,132	3		275	4,135	4,410	289	4,121	2010	2015	35 years
Carson Tahoe Specialty Medical Center	Carson City	NV	—	688	11,346	124		688	11,470	12,158	871	11,287	1981	2015	35 years
Carson Tahoe MOB West	Carson City	NV	—	2,862	27,519	66		2,862	27,585	30,447	2,510	27,937	2007	2015	29 years
Del E Webb Medical Plaza	Henderson	NV	—	1,028	16,993	1,463		1,028	18,456	19,484	4,320	15,164	1999	2011	35 years
Durango Medical Plaza	Las Vegas	NV	—	3,787	27,738	(3,679	)	3,660	24,186	27,846	1,906	25,940	2008	2015	35 years
The Terrace at South Meadows	Reno	NV	6,831	504	9,966	609		504	10,575	11,079	2,696	8,383	2004	2011	35 years
Albany Medical Center MOB	Albany	NY	—	321	18,389	—		321	18,389	18,710	1,107	17,603	2010	2015	35 years
St. Peter's Recovery Center	Guilderland	NY	—	1,059	9,156	—		1,059	9,156	10,215	741	9,474	1990	2015	35 years
Central NY Medical Center	Syracuse	NY	24,500	1,786	26,101	2,620		1,792	28,715	30,507	5,783	24,724	1997	2012	33 years
Northcountry MOB	Watertown	NY	—	1,320	10,799	6		1,320	10,805	12,125	890	11,235	2001	2015	35 years
Anderson Medical Arts Building I	Cincinnati	OH	—	—	9,632	1,892		—	11,524	11,524	4,181	7,343	1984	2007	35 years
Anderson Medical Arts Building II	Cincinnati	OH	—	—	15,123	2,285		—	17,408	17,408	6,280	11,128	2007	2007	35 years
Riverside North Medical Office Building	Columbus	OH	8,420	785	8,519	1,350		785	9,869	10,654	2,821	7,833	1962	2012	25 years
Riverside South Medical Office Building	Columbus	OH	6,311	586	7,298	807		610	8,081	8,691	2,073	6,618	1985	2012	27 years
340 East Town Medical Office Building	Columbus	OH	5,862	10	9,443	864		10	10,307	10,317	2,221	8,096	1984	2012	29 years
393 East Town Medical Office Building	Columbus	OH	3,288	61	4,760	252		61	5,012	5,073	1,332	3,741	1970	2012	20 years
141 South Sixth Medical Office Building	Columbus	OH	1,544	80	1,113	4		80	1,117	1,197	470	727	1971	2012	14 years
Doctors West Medical Office Building	Columbus	OH	4,705	414	5,362	711		414	6,073	6,487	1,344	5,143	1998	2012	35 years
Eastside Health Center	Columbus	OH	4,399	956	3,472	(2	)	956	3,470	4,426	1,412	3,014	1977	2012	15 years
East Main Medical Office Building	Columbus	OH	5,226	440	4,771	63		440	4,834	5,274	1,037	4,237	2006	2012	35 years
Heart Center Medical Office Building	Columbus	OH	—	1,063	12,140	280		1,063	12,420	13,483	2,775	10,708	2004	2012	35 years
Wilkins Medical Office Building	Columbus	OH	—	123	18,062	344		123	18,406	18,529	3,224	15,305	2002	2012	35 years

179



	Location			Initial Cost to Company				Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition		Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Grady Medical Office Building	Delaware	OH	1,824	239	2,263	333		239	2,596	2,835	790	2,045	1991	2012	25 years
Dublin Northwest Medical Office Building	Dublin	OH	3,118	342	3,278	234		342	3,512	3,854	889	2,965	2001	2012	34 years
Preserve III Medical Office Building	Dublin	OH	9,684	2,449	7,025	(66	)	2,449	6,959	9,408	1,633	7,775	2006	2012	35 years
Zanesville Surgery Center	Zanesville	OH	—	172	9,403	—		172	9,403	9,575	1,799	7,776	2000	2011	35 years
Dialysis Center	Zanesville	OH	—	534	855	71		534	926	1,460	463	997	1960	2011	21 years
Genesis Children's Center	Zanesville	OH	—	538	3,781	—		538	3,781	4,319	1,002	3,317	2006	2011	30 years
Medical Arts Building I	Zanesville	OH	—	429	2,405	500		436	2,898	3,334	989	2,345	1970	2011	20 years
Medical Arts Building II	Zanesville	OH	—	485	6,013	807		510	6,795	7,305	2,386	4,919	1995	2011	25 years
Medical Arts Building III	Zanesville	OH	—	94	1,248	—		94	1,248	1,342	438	904	1970	2011	25 years
Primecare Building	Zanesville	OH	—	130	1,344	648		130	1,992	2,122	620	1,502	1978	2011	20 years
Outpatient Rehabilitation Building	Zanesville	OH	—	82	1,541	—		82	1,541	1,623	441	1,182	1985	2011	28 years
Radiation Oncology Building	Zanesville	OH	—	105	1,201	—		105	1,201	1,306	404	902	1988	2011	25 years
Healthplex	Zanesville	OH	—	2,488	15,849	578		2,508	16,407	18,915	4,405	14,510	1990	2011	32 years
Physicians Pavilion	Zanesville	OH	—	422	6,297	1,368		422	7,665	8,087	2,254	5,833	1990	2011	25 years
Zanesville Northside Pharmacy	Zanesville	OH	—	42	635	—		42	635	677	189	488	1985	2011	28 years
Bethesda Campus MOB III	Zanesville	OH	—	188	1,137	135		199	1,261	1,460	401	1,059	1978	2011	25 years
Tuality 7th Avenue Medical Plaza	Hillsboro	OR	18,547	1,516	24,638	463		1,533	25,084	26,617	5,689	20,928	2003	2011	35 years
Professional Office Building I	Chester	PA	—	—	6,283	1,737		—	8,020	8,020	3,780	4,240	1978	2004	30 years
DCMH Medical Office Building	Drexel Hill	PA	—	—	10,424	1,540		—	11,964	11,964	5,780	6,184	1984	2004	30 years
Pinnacle Health	Harrisburg	PA	—	2,574	16,767	235		2,674	16,902	19,576	1,350	18,226	2002	2015	35 years
Penn State University Outpatient Center	Hershey	PA	57,415	—	55,439	—		—	55,439	55,439	12,665	42,774	2008	2010	35 years
Lancaster Rehabilitation Hospital	Lancaster	PA	—	959	16,610	(16	)	959	16,594	17,553	3,151	14,402	2007	2012	35 years
Lancaster ASC MOB	Lancaster	PA	—	593	17,117	30		593	17,147	17,740	3,694	14,046	2007	2012	35 years
St. Joseph Medical Office Building	Reading	PA	—	—	10,823	811		—	11,634	11,634	3,219	8,415	2006	2010	35 years
Crozer - Keystone MOB I	Springfield	PA	—	9,130	47,078	—		9,130	47,078	56,208	4,113	52,095	1996	2015	35 years
Crozer-Keystone MOB II	Springfield	PA	—	5,178	6,523	—		5,178	6,523	11,701	606	11,095	1998	2015	25 years
Doylestown Health & Wellness Center	Warrington	PA	—	4,452	17,383	910		4,497	18,248	22,745	4,068	18,677	2001	2012	34 years
Roper Medical Office Building	Charleston	SC	8,133	127	14,737	2,949		127	17,686	17,813	4,053	13,760	1990	2012	28 years
St. Francis Medical Plaza (Charleston)	Charleston	SC	—	447	3,946	418		447	4,364	4,811	1,154	3,657	2003	2012	35 years
Providence MOB I	Columbia	SC	—	225	4,274	587		225	4,861	5,086	1,751	3,335	1979	2012	18 years
Providence MOB II	Columbia	SC	—	122	1,834	85		122	1,919	2,041	747	1,294	1985	2012	18 years

180



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Providence MOB III	Columbia	SC	—	766	4,406	524	766	4,930	5,696	1,385	4,311	1990	2012	23 years
One Medical Park	Columbia	SC	—	210	7,939	843	214	8,778	8,992	2,856	6,136	1984	2012	19 years
Three Medical Park	Columbia	SC	—	40	10,650	924	40	11,574	11,614	3,237	8,377	1988	2012	25 years
St. Francis Millennium Medical Office Building	Greenville	SC	14,754	—	13,062	10,581	30	23,613	23,643	8,573	15,070	2009	2009	35 years
200 Andrews	Greenville	SC	—	789	2,014	220	789	2,234	3,023	1,042	1,981	1994	2012	29 years
St. Francis CMOB	Greenville	SC	—	501	7,661	725	501	8,386	8,887	1,711	7,176	2001	2012	35 years
St. Francis Outpatient Surgery Center	Greenville	SC	—	1,007	16,538	485	1,007	17,023	18,030	3,620	14,410	2001	2012	35 years
St. Francis Professional Medical Center	Greenville	SC	—	342	6,337	763	362	7,080	7,442	1,766	5,676	1984	2012	24 years
St. Francis Women's	Greenville	SC	—	322	4,877	285	322	5,162	5,484	1,820	3,664	1991	2012	24 years
St. Francis Medical Plaza (Greenville)	Greenville	SC	—	88	5,876	526	88	6,402	6,490	1,660	4,830	1998	2012	24 years
Irmo Professional MOB	Irmo	SC	—	1,726	5,414	139	1,726	5,553	7,279	1,657	5,622	2004	2011	35 years
River Hills Medical Plaza	Little River	SC	—	1,406	1,813	107	1,406	1,920	3,326	615	2,711	1999	2012	27 years
Mount Pleasant Medical Office Longpoint	Mount Pleasant	SC	—	670	4,455	122	692	4,555	5,247	1,730	3,517	2001	2012	34 years
Mary Black Westside Medical Office Bldg	Spartanburg	SC	—	291	5,057	425	300	5,473	5,773	1,365	4,408	1991	2012	31 years
Spartanburg ASC	Spartanburg	SC	—	1,333	15,756	—	1,333	15,756	17,089	999	16,090	2002	2015	35 years
Spartanburg Regional MOB	Spartanburg	SC	—	207	17,963	253	286	18,137	18,423	1,293	17,130	1986	2015	35 years
Wellmont Blue Ridge MOB	Bristol	TN	—	999	5,027	—	999	5,027	6,026	413	5,613	2001	2015	35 years
Health Park Medical Office Building	Chattanooga	TN	6,122	2,305	8,949	37	2,305	8,986	11,291	1,917	9,374	2004	2012	35 years
Peerless Crossing Medical Center	Cleveland	TN	—	1,217	6,464	10	1,217	6,474	7,691	1,302	6,389	2006	2012	35 years
St. Mary's Clinton Professional Office Building	Clinton	TN	—	298	618	6	298	624	922	78	844	1988	2015	39 years
St. Mary's Farragut MOB	Farragut	TN	—	221	2,719	49	221	2,768	2,989	194	2,795	1997	2015	39 years
Medical Center Physicians Tower	Jackson	TN	12,894	549	27,074	44	549	27,118	27,667	5,568	22,099	2010	2012	35 years
St. Mary's Physical Therapy & Rehabilitation Center East	Jefferson City	TN	—	120	160	—	120	160	280	43	237	1985	2015	39 years
St. Mary's Physician Professional Office Building	Knoxville	TN	—	138	3,144	—	138	3,144	3,282	275	3,007	1981	2015	39 years
St. Mary's Magdalene Clarke Tower	Knoxville	TN	—	69	4,153	4	69	4,157	4,226	320	3,906	1972	2015	39 years
St. Mary's Medical Office Building	Knoxville	TN	—	136	359	—	136	359	495	67	428	1976	2015	39 years
St. Mary's Ambulatory Surgery Center	Knoxville	TN	—	129	1,012	—	129	1,012	1,141	119	1,022	1999	2015	24 years
Texas Clinic at Arlington	Arlington	TX	—	2,781	24,515	4	2,781	24,519	27,300	1,769	25,531	2010	2015	35 years
Seton Medical Park Tower	Austin	TX	—	805	41,527	1,954	1,061	43,225	44,286	7,136	37,150	1968	2012	35 years
Seton Northwest Health Plaza	Austin	TX	—	444	22,632	1,676	444	24,308	24,752	4,264	20,488	1988	2012	35 years

181



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Seton Southwest Health Plaza	Austin	TX	—	294	5,311	133	294	5,444	5,738	930	4,808	2004	2012	35 years
Seton Southwest Health Plaza II	Austin	TX	—	447	10,154	20	447	10,174	10,621	1,730	8,891	2009	2012	35 years
BioLife Sciences Building	Denton	TX	—	1,036	6,576	—	1,036	6,576	7,612	537	7,075	2010	2015	35 years
East Houston MOB, LLC	Houston	TX	—	356	2,877	431	328	3,336	3,664	1,746	1,918	1982	2011	15 years
East Houston Medical Plaza	Houston	TX	—	671	426	513	671	939	1,610	668	942	1982	2011	11 years
Memorial Hermann	Houston	TX	—	822	14,307	—	822	14,307	15,129	953	14,176	2012	2015	35 years
Scott & White Healthcare	Kingsland	TX	—	534	5,104	—	534	5,104	5,638	390	5,248	2012	2015	35 years
Odessa Regional MOB	Odessa	TX	—	121	8,935	—	121	8,935	9,056	619	8,437	2008	2015	35 years
Legacy Heart Center	Plano	TX	—	3,081	8,890	8	3,081	8,898	11,979	750	11,229	2005	2015	35 years
Seton Williamson Medical Plaza	Round Rock	TX	—	—	15,074	448	—	15,522	15,522	4,296	11,226	2008	2010	35 years
Sunnyvale Medical Plaza	Sunnyvale	TX	—	1,186	15,397	4	1,186	15,401	16,587	1,218	15,369	2009	2015	35 years
Texarkana ASC	Texarkana	TX	—	814	5,903	—	814	5,903	6,717	516	6,201	1994	2015	30 years
Spring Creek Medical Plaza	Tomball	TX	—	2,165	8,212	—	2,165	8,212	10,377	589	9,788	2006	2015	35 years
251 Medical Center	Webster	TX	—	1,158	12,078	178	1,158	12,256	13,414	2,208	11,206	2006	2011	35 years
253 Medical Center	Webster	TX	—	1,181	11,862	3	1,181	11,865	13,046	2,066	10,980	2009	2011	35 years
MRMC MOB I	Mechanicsville	VA	—	1,669	7,024	418	1,669	7,442	9,111	2,302	6,809	1993	2012	31 years
Henrico MOB	Richmond	VA	—	968	6,189	841	968	7,030	7,998	2,241	5,757	1976	2011	25 years
St. Mary's MOB North (Floors 6 & 7)	Richmond	VA	—	227	2,961	301	227	3,262	3,489	1,054	2,435	1968	2012	22 years
Virginia Urology Center	Richmond	VA	—	3,822	16,127	—	3,822	16,127	19,949	1,248	18,701	2004	2015	35 years
St. Francis Cancer Center	Richmond	VA	—	654	18,331	3	657	18,331	18,988	1,324	17,664	2006	2015	35 years
Bonney Lake Medical Office Building	Bonney Lake	WA	10,467	5,176	14,375	170	5,176	14,545	19,721	3,151	16,570	2011	2012	35 years
Good Samaritan Medical Office Building	Puyallup	WA	13,648	781	30,368	588	781	30,956	31,737	5,403	26,334	2011	2012	35 years
Holy Family Hospital Central MOB	Spokane	WA	—	—	19,085	260	—	19,345	19,345	2,540	16,805	2007	2012	35 years
Physician's Pavilion	Vancouver	WA	—	1,411	32,939	914	1,424	33,840	35,264	7,427	27,837	2001	2011	35 years
Administration Building	Vancouver	WA	—	296	7,856	—	296	7,856	8,152	1,712	6,440	1972	2011	35 years
Medical Center Physician's Building	Vancouver	WA	—	1,225	31,246	2,480	1,246	33,705	34,951	6,822	28,129	1980	2011	35 years
Memorial MOB	Vancouver	WA	—	663	12,626	339	690	12,938	13,628	2,793	10,835	1999	2011	35 years
Salmon Creek MOB	Vancouver	WA	—	1,325	9,238	—	1,325	9,238	10,563	1,991	8,572	1994	2011	35 years
Fisher's Landing MOB	Vancouver	WA	—	1,590	5,420	—	1,590	5,420	7,010	1,408	5,602	1995	2011	34 years
Columbia Medical Plaza	Vancouver	WA	—	281	5,266	228	331	5,444	5,775	1,235	4,540	1991	2011	35 years
Appleton Heart Institute	Appleton	WI	—	—	7,775	38	—	7,813	7,813	1,901	5,912	2003	2010	39 years
Appleton Medical Offices West	Appleton	WI	—	—	5,756	82	—	5,838	5,838	1,435	4,403	1989	2010	39 years
Appleton Medical Offices South	Appleton	WI	—	—	9,058	185	—	9,243	9,243	2,358	6,885	1983	2010	39 years
Brookfield Clinic	Brookfield	WI	—	2,638	4,093	—	2,638	4,093	6,731	1,095	5,636	1999	2011	35 years

182



	Location			Initial Cost to Company			Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances	Land and Improvements	Buildings and Improvements	Costs Capitalized Subsequent to Acquisition	Land and Improvements	Buildings and Improvements	Total	Accumulated Depreciation	NBV	Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
Lakeshore Medical Clinic - Franklin	Franklin	WI	—	1,973	7,579	56	2,029	7,579	9,608	619	8,989	2008	2015	34 years
Lakeshore Medical Clinic - Greenfield	Greenfield	WI	—	1,223	13,387	9	1,223	13,396	14,619	902	13,717	2010	2015	35 years
Aurora Health Care - Hartford	Hartford	WI	—	3,706	22,019	—	3,706	22,019	25,725	1,673	24,052	2006	2015	35 years
Hartland Clinic	Hartland	WI	—	321	5,050	—	321	5,050	5,371	1,151	4,220	1994	2011	35 years
Aurora Healthcare - Kenosha	Kenosha	WI	—	7,546	19,155	—	7,546	19,155	26,701	1,487	25,214	2014	2015	35 years
Univ of Wisconsin Health	Monona	WI	5,039	678	8,017	—	678	8,017	8,695	664	8,031	2011	2015	35 years
Theda Clark Medical Center Office Pavilion	Neenah	WI	—	—	7,080	286	—	7,366	7,366	1,785	5,581	1993	2010	39 years
Aylward Medical Building Condo Floors 3 & 4	Neenah	WI	—	—	4,462	7	—	4,469	4,469	1,195	3,274	2006	2010	39 years
Aurora Health Care - Neenah	Neenah	WI	—	2,033	9,072	—	2,033	9,072	11,105	740	10,365	2006	2015	35 years
New Berlin Clinic	New Berlin	WI	—	678	7,121	—	678	7,121	7,799	1,745	6,054	1999	2011	35 years
United Healthcare - Onalaska	Onalaska	WI	—	4,623	5,527	—	4,623	5,527	10,150	585	9,565	1995	2015	35 years
WestWood Health & Fitness	Pewaukee	WI	—	823	11,649	—	823	11,649	12,472	2,880	9,592	1997	2011	35 years
Aurora Health Care - Two Rivers	Two Rivers	WI	—	5,638	25,308	—	5,638	25,308	30,946	1,938	29,008	2006	2015	35 years
Watertown Clinic	Watertown	WI	—	166	3,234	—	166	3,234	3,400	711	2,689	2003	2011	35 years
Southside Clinic	Waukesha	WI	—	218	5,273	—	218	5,273	5,491	1,176	4,315	1997	2011	35 years
Rehabilitation Hospital	Waukesha	WI	—	372	15,636	—	372	15,636	16,008	3,053	12,955	2008	2011	35 years
United Healthcare - Wauwatosa	Wawatosa	WI	—	8,012	15,992	—	8,012	15,992	24,004	1,501	22,503	1995	2015	35 years
BSG CS, LLC	Waunakee	WI	—	1,060	—	—	1,060	—	1,060	—	1,060	N/A	2012	35 years
TOTAL FOR MEDICAL OFFICE BUILDINGS			551,416	393,203	4,123,987	194,963	395,122	4,317,031	4,712,153	797,015	3,915,138
LIFE SCIENCES OFFICE BUILDINGS
100 College Street	New Haven	CT	—	2,706	186,570	—	2,706	186,570	189,276	1,286	187,990	2013	2016	59 years
300 George Street	New Haven	CT	—	2,262	122,144	—	2,262	122,144	124,406	922	123,484	2014	2016	50 years
Univ. of Miami Life Science and Technology Park	Miami	FL	—	2,249	87,019	—	2,249	87,019	89,268	660	88,608	2014	2016	53 years
IIT	Chicago	IL	—	30	55,620	—	30	55,620	55,650	454	55,196	2006	2016	46 years
University of Maryland BioPark I Unit 1	Baltimore	MD	—	113	25,199	—	113	25,199	25,312	200	25,112	2005	2016	50 years
University of Maryland BioPark II	Baltimore	MD	—	61	91,764	—	61	91,764	91,825	833	90,992	2007	2016	50 years
University of Maryland BioPark Garage	Baltimore	MD	—	77	4,677	—	77	4,677	4,754	66	4,688	2007	2016	29 years
Tributary Street	Baltimore	MD	—	4,015	15,905	—	4,015	15,905	19,920	188	19,732	1998	2016	45 years
Beckley Street	Baltimore	MD	—	2,813	13,481	—	2,813	13,481	16,294	164	16,130	1999	2016	45 years
873 West Baltimore Street	Baltimore	MD	—	980	8	—	980	8	988	—	988	CIP	CIP	CIP
Heritage at 4240	Saint Louis	MO	—	403	47,125	—	403	47,125	47,528	529	46,999	2013	2016	45 years
Cortex 1	Saint Louis	MO	—	631	26,543	—	631	26,543	27,174	319	26,855	2005	2016	50 years

183



	Location				Initial Cost to Company							Gross Amount Carried at Close of Period
Property Name	City	State / Province	Encumbrances		Land and Improvements		Buildings and Improvements			Costs Capitalized Subsequent to Acquisition		Land and Improvements		Buildings and Improvements			Total			Accumulated Depreciation		NBV			Year of Construction	Year Acquired	Life on Which Depreciation in Income Statement is Computed
BRDG Park	Saint Louis	MO	—		606		37,083			—		606		37,083			37,689			295		37,394			2009	2016	52 years
311 South Sarah Street	St. Louis	MO	—		7,113		133			—		7,113		133			7,246			—		7,246			CIP	CIP	CIP
Weston Parkway	Cary	NC	—		1,372		6,535			—		1,372		6,535			7,907			68		7,839			1990	2016	50 years
Patriot Drive	Durham	NC	—		1,960		10,749			—		1,960		10,749			12,709			124		12,585			2010	2016	50 years
701 W. Main Street	Durham	NC	36,187		2,190		65,599			—		2,190		65,599			67,789			—		67,789			CIP	CIP	CIP
Paramount Parkway	Morrisville	NC	—		1,016		19,794			—		1,016		19,794			20,810			212		20,598			1999	2016	45 years
Wake 90	Winston-Salem	NC	—		2,752		79,949			—		2,752		79,949			82,701			799		81,902			2013	2016	40 years
Wake 91	Winston-Salem	NC	—		1,729		73,690			—		1,729		73,690			75,419			599		74,820			2011	2016	50 years
Wake 60	Winston-Salem	NC	15,000		1,243		83,414			—		1,243		83,414			84,657			399		84,258			2016	2016	35 years
450 North Patterson Avenue	Winston-Salem	NC	—		1,930		5,513			—		1,930		5,513			7,443			—		7,443			CIP	CIP	CIP
Hershey Center Unit 1	Hummelstown	PA	—		813		23,699			—		813		23,699			24,512			225		24,287			2007	2016	50 years
3737 Market Street	Philadelphia	PA	—		40		141,981			—		40		141,981			142,021			945		141,076			2014	2016	54 years
3711 Market Street	Philadelphia	PA	—		12,320		69,278			—		12,320		69,278			81,598			565		81,033			2008	2016	48 years
3750 Lancaster Avenue	Philadelphia	PA	—		—		88			—		—		88			88			—		88			CIP	CIP	CIP
3675 Market Street	Philadelphia	PA	—		3,300		1,931			—		3,300		1,931			5,231			—		5,231			CIP	CIP	CIP
3701 Filbert Street	Philadelphia	PA	—		—		(205		)	—		—		(205		)	(205		)	—		(205		)	CIP	CIP	CIP
115 North 38th Street	Philadelphia	PA	—		—		2			—		—		2			2			—		2			CIP	CIP	CIP
225 North 38th Street	Philadelphia	PA	—		—		19			—		—		19			19			—		19			CIP	CIP	CIP
IRP I	Norfolk	VA	—		60		20,084			—		60		20,084			20,144			179		19,965			2007	2016	55 years
IRP II	Norfolk	VA	—		69		21,255			—		69		21,255			21,324			174		21,150			2007	2016	55 years
TOTAL LIFE SCIENCES OFFICE BUILDINGS			51,187		54,853		1,336,646			—		54,853		1,336,646			1,391,499			10,205		1,381,294
TOTAL FOR ALL OFFICE BUILDINGS			602,603		448,056		5,460,633			194,963		449,975		5,653,677			6,103,652			807,220		5,296,432
TOTAL FOR ALL PROPERTIES			$	1,718,898	$	2,100,288	$	21,115,857		$	600,441	$	2,089,591	$	21,726,995		$	23,816,586		$	4,190,496	$	19,626,090

184

VENTAS, INC.

SCHEDULE IV

REAL ESTATE MORTGAGE LOANS

December 31, 2016

(Dollars in Thousands)



	Location	Number of RE Assets	Interest Rate	Fixed / Variable	Maturity Date	Monthly Debt Service	Face Value	Net Book Value	Prior Liens

First Mortgages
	Washington	1	8.00%	F	8/1/2020	172	25,000	24,854	—
	Washington	1	6.00%	F	7/5/2017	70	6,030	6,000	—
	Multiple	3	9.21%	V	6/30/2019	136	17,023	17,023	—
	Ohio	5	7.89%	V	10/1/2021	531	78,448	78,448	—

Mezzanine Loans
	Multiple	31	9.95%	F/V	2/6/2021	1,200	140,000	140,000	1,636,400
	Multiple*	179	8.27%	F/V	12/9/2019	2,132	309,423	309,423	1,600,242

Construction Loans
	Colorado	1	8.75%	V	2/6/2021	445	59,044	58,453	—

* The variable portion of this investment has a maturity date of 12/9/2017, with extension options to 12/9/2019.



Mortgage Loan Reconciliation (Dollars in thousands)
Mortgage Loan Reconciliation (Dollars in thousands)

	2016			2015			2014
Beginning Balance	$	784,821		$	747,456		$	335,656
Additions:
New Loans	140,000			88,648			451,269
Construction Draws	13,403			53,708			—
Total additions	153,403			142,356			451,269
Deductions:
Principal Repayments	(303,255		)	(99,467		)	(21,159		)
Conversions to Real Property	—			—			(18,310		)
Sales and Syndications	—			—			—
Spin Off	—			(5,524		)	—
Total deductions	(303,255		)	(104,991		)	(39,469		)
Ending Balance	$	634,969		$	784,821		$	747,456

185

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2016 . Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of December 31, 2016 , at the reasonable assurance level.

Internal Control over Financial Reporting

The information set forth under “Management Report on Internal Control over Financial Reporting” and “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting” included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 9A.

Internal Control Changes

During the fourth quarter of 2016 , there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. Other Information

Not applicable.

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance

The information required by this Item 10 is incorporated by reference to the material under the headings “Proposals Requiring Your Vote—Proposal 1: Election of Directors,” “Our Executive Officers,” “Securities Ownership—Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance—Governance Policies” and “Audit and Compliance Committee” in our definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, which we will file with the SEC not later than May 1, 2017 .

ITEM 11. Executive Compensation

The information required by this Item 11 is incorporated by reference to the material under the headings “Executive Compensation,” “Non-Employee Director Compensation” and “Executive Compensation Committee” in our definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, which we will file with the SEC not later than May 1, 2017 .

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is incorporated by reference to the material under the headings “Equity Compensation Plan Information” and “Securities Ownership” in our definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, which we will file with the SEC not later than May 1, 2017 .

186

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated by reference to the material under the headings “Corporate Governance—Transactions with Related Persons,” “Our Board of Directors—Director Independence,” “Audit and Compliance Committee,” “Executive Compensation Committee” and “Nominating and Corporate Governance Committee” in our definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, which we will file with the SEC not later than May 1, 2017 .

ITEM 14. Principal Accountant Fees and Services

The information required by this Item 14 is incorporated by reference to the material under the heading “Proposals Requiring Your Vote—Proposal 2: Ratification of the Selection of KPMG LLP as Our Independent Registered Public Accounting Firm for Fiscal Year 2017 ” in our definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, which we will file with the SEC not later than May 1, 2017 .

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

Financial Statements and Financial Statement Schedules

The following documents have been included in Part II, Item 8 of this Annual Report on Form 10-K:



	Page
Report of Independent Registered Public Accounting Firm	82
Consolidated Balance Sheets as of December 31, 2016 and 2015	84
Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014	85
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	86
Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014	87
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	88
Notes to Consolidated Financial Statements	90
Consolidated Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts	144
Schedule III — Real Estate and Accumulated Depreciation	145
Schedule IV — Mortgage Loans on Real Estate	185

All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the Consolidated Financial Statements or notes thereto.

188

Exhibits



Exhibit Number	Description of Document	Location of Document
2.1	Separation and Distribution Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 2.1 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

3.1	Amended and Restated Certificate of Incorporation, as amended, of Ventas, Inc.	Incorporated by reference herein. Previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 5, 2011, File No. 001-10989.

3.2	Fifth Amended and Restated Bylaws, as amended, of Ventas, Inc.	Incorporated by reference herein. Previously filed as Exhibit 3.2 to our Current Report on Form 8-K, filed on January 11, 2017, File No. 001-10989.

4.1	Specimen common stock certificate.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed on February 12, 2016, File No. 001-10989.

4.2	Indenture dated as of September 19, 2006 by and among Ventas, Inc., Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuer(s), the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.9 to our Registration Statement on Form S-3, filed on April 7, 2006, File No. 333-133115.

4.3	Fourth Supplemental Indenture dated as of May 17, 2011 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.750% Senior Notes due 2021.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on May 20, 2011, File No. 001-10989.

4.4	Fifth Supplemental Indenture dated as of February 10, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.250% Senior Notes due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on February 14, 2012, File No. 001-10989.

4.5	Sixth Supplemental Indenture dated as of April 17, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.000% Senior Notes due 2019.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 18, 2012, File No. 001-10989.

4.6	Seventh Supplemental Indenture dated as of August 3, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on October 26, 2012, File No. 001-10989.

4.7	Eighth Supplemental Indenture dated as of December 13, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 2.000% Senior Notes due 2018.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on December 13, 2012, File No. 001-10989.

4.8	Ninth Supplemental Indenture dated as of March 7, 2013 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.450% Senior Notes due 2043.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Registration Statement on Form 8-A, filed on March 7, 2013, File No. 001-10989.

189



Exhibit Number	Description of Document	Location of Document
4.9	Tenth Supplemental Indenture dated as of March 19, 2013 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 2.700% Senior Notes due 2020.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on March 19, 2013, File No. 001-10989.

4.10	Indenture dated as of September 26, 2013 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.	Filed herewith.

4.11	Second Supplemental Indenture dated as of September 26, 2013 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.700% Senior Notes due 2043.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on September 26, 2013, File No. 001-10989.

4.12	Third Supplemental Indenture dated as of April 17, 2014 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 1.250% Senior Notes due 2017.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 17, 2014, File No. 001-10989.

4.13	Fourth Supplemental Indenture dated as of April 17, 2014 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.750% Senior Notes due 2024.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 17, 2014, File No. 001-10989.

4.14	Fifth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.500% Senior Notes due 2025.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.

4.15	Sixth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.375% Senior Notes due 2045.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.

4.16	Indenture dated as of August 19, 1997 by and between Nationwide Health Properties, Inc. and The Bank of New York, as Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038.	Incorporated by reference herein. Previously filed as Exhibit 1.2 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on August 19, 1997, File No. 001-09028.

4.17	Supplemental Indenture dated July 1, 2011 among Nationwide Health Properties, Inc., Needles Acquisition LLC, and The Bank of New York Mellon Trust Company, N.A., as successor Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038.	Filed herewith.

4.18	Indenture dated as September 24, 2014 by and among Ventas, Inc., Ventas Canadian Finance Limited, the Guarantors parties thereto from time to time and Computershare Trust Company of Canada, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

190



Exhibit Number	Description of Document	Location of Document
4.19	First Supplemental Indenture dated as of September 24, 2014 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 3.00% Senior Notes, Series A due 2019.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

4.20	Second Supplemental Indenture dated as of September 24, 2014 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 4.125% Senior Notes, Series B due 2024.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

4.21	Third Supplemental Indenture dated as of January 13, 2015 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 3.30% Senior Notes, Series C due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.24 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.

4.22	Indenture dated as of July 16, 2015 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein as Guarantors, and U.S. Bank National Association, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.

4.23	First Supplemental Indenture dated as of July 16, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.125% Senior Notes due 2026.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.

4.24	Second Supplemental Indenture dated as of June 2, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.125% Senior Notes due 2023.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on June 2, 2016, File No. 001-10989.

4.25	Third Supplemental Indenture dated as of September 21, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2026.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on September 21, 2016, File No. 001-10989.

10.1	First Amended and Restated Agreement of Limited Partnership of Ventas Realty, Limited Partnership.	Incorporated by reference herein. Previously filed as Exhibit 3.5 to our Registration Statement on Form S-4, as amended, filed on May 29, 2002, File No. 333-89312.

10.2	Amended and Restated Credit and Guaranty Agreement, dated as of December 9, 2013, among Ventas Realty, Limited Partnership, Ventas SSL Ontario II, Inc. and Ventas SSL Ontario III, Inc., as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and Alternative Currency Fronting Lender.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on December 11, 2013, File No. 001-10989.

10.3	First Amendment dated as of July 28, 2015 to that certain Amended and Restated Credit and Guaranty Agreement by and among Ventas Realty, Limited Partnership, Ventas Canada Finance Limited, Ventas UK Finance, Inc., Ventas Euro Finance, LLC, Ventas SSL Ontario II, Inc. and Ventas SSL Ontario III, Inc., as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and Alternative Currency Fronting Lender.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on July 31, 2015, File No. 001-10989.

191



Exhibit Number	Description of Document	Location of Document
10.4	Second Amendment and Joinder dated as of October 14, 2015 to that certain Amended and Restated Credit and Guaranty Agreement by and among Ventas Realty, Limited Partnership, Ventas Canada Finance Limited, Ventas UK Finance, Inc., Ventas Euro Finance, LLC, Ventas SSL Ontario II, Inc. and Ventas SSL Ontario III, Inc., as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender L/C Issuer and Alternative Currency Fronting Lender.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on October 19, 2015, File No. 001-10989.

10.5	Tax Matters Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

10.6	Employee Matters Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 10.3 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

10.7*	Ventas, Inc. 2004 Stock Plan for Directors, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.16.1 to our Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 1, 2005, File No. 33-107942.

10.8.1*	Ventas, Inc. 2006 Incentive Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.10.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.8.2*	Form of Stock Option Agreement—2006 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.

10.8.3*	Form of Restricted Stock Agreement—2006 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.15.3 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.

10.9.1*	Ventas, Inc. 2006 Stock Plan for Directors, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.

10.9.2*	Form of Stock Option Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.11.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.9.3*	Form of Amendment to Stock Option Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.

10.9.4*	Form of Restricted Stock Unit Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.11.4 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.10.1*	Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on May 23, 2012, File No. 001-10989.

10.10.2*	Form of Stock Option Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6.2 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed February 13, 2015, File No. 001-10989.

192



Exhibit Number	Description of Document	Location of Document
10.10.3*	Form of Restricted Stock Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6.3 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.

10.10.4*	Form of Stock Option Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.4 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

10.10.5*	Form of Restricted Stock Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.5 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

10.10.6*	Form of Restricted Stock Unit Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

10.11.1*	Ventas Executive Deferred Stock Compensation Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.12.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.11.2*	Deferral Election Form under the Ventas Executive Deferred Stock Compensation Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.12.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.12.1*	Ventas Nonemployee Directors’ Deferred Stock Compensation Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.13.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.12.2*	Deferral Election Form under the Ventas Nonemployee Directors’ Deferred Stock Compensation Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.13.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.13.1*	Nationwide Health Properties, Inc. 2005 Performance Incentive Plan.	Incorporated by reference herein. Previously filed as Appendix B to the Nationwide Health Properties, Inc. definitive Proxy Statement for the 2005 Annual Meeting, filed on March 24, 2005, File No. 001-09028.

10.13.2*	First Amendment to the Nationwide Health Properties, Inc. 2005 Performance Incentive Plan, dated October 28, 2008.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on November 3, 2008, File No. 001-09028.

10.14.1*	Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to the Nationwide Health Properties, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed on May 4, 2006, File No. 001-09028.

10.14.2*	Amendment dated October 28, 2008 to the Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006.	Incorporated by reference herein. Previously filed as Exhibit 10.9 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on November 3, 2008, File No. 001-09028.

10.15*	Second Amended and Restated Employment Agreement dated as of March 22, 2011 between Ventas, Inc. and Debra A. Cafaro.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on March 24, 2011, File No. 001-10989.

10.16.1*	Employment Agreement dated as of July 31, 1998 between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2.1 to our Annual Report on Form 10-K for the year ended December 31, 2002, filed on February 26, 2003, File No. 001-10989.

193



Exhibit Number	Description of Document	Location of Document
10.16.2*	Amendment dated as of September 30, 1999 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2.2 to our Annual Report on Form 10-K for the year ended December 31, 2002, filed on February 26, 2003, File No. 001-10989.

10.16.3*	Amendment dated as of March 19, 2007 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on March 23, 2007, File No. 001-10989.

10.16.4*	Amendment dated as of December 31, 2008 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.4 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.16.5*	Amended and Restated Change-in-Control Severance Agreement dated as of March 22, 2011 between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on March 24, 2011, File No. 001-10989.

10.17*	Employment Agreement dated as of June 22, 2010 between Ventas, Inc. and Todd W. Lillibridge.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, filed on July 30, 2010, File No. 001-10989.

10.18*	Employee Protection and Noncompetition Agreement dated as of October 21, 2013 between Ventas, Inc. and John D. Cobb.	Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014, File No. 001-10989.

10.19.1*	Offer Letter dated September 16, 2014 from Ventas, Inc. to Robert F. Probst.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.

10.19.2*	Employee Protection and Noncompetition Agreement dated September 16, 2014 between Ventas, Inc. and Robert F. Probst.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.

10.20*	Employee Protection and Noncompetition Agreement dated June 17, 2015 between Ventas, Inc. and Todd W. Lillibridge.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on June 23, 2015, File No. 001-10989.

10.21*	Ventas Employee and Director Stock Purchase Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

12	Statement Regarding Computation of Ratios of Earnings to Fixed Charges.	Filed herewith.

21	Subsidiaries of Ventas, Inc.	Filed herewith.

23	Consent of KPMG LLP.	Filed herewith.

31.1	Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(a) under the Exchange Act.	Filed herewith.

31.2	Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) under the Exchange Act.	Filed herewith.

32.1	Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350.	Filed herewith.

32.2	Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350.	Filed herewith.

101	Interactive Data File.	Filed herewith.

* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.

194

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 13, 2017



		VENTAS, INC.

		By:	/s/ DEBRA A. CAFARO
			Debra A. Cafaro Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

195



Signature	Title	Date

/s/ DEBRA A. CAFARO	Chairman and Chief Executive Officer (Principal Executive Officer)	February 13, 2017
Debra A. Cafaro

/s/ ROBERT F. PROBST	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	February 13, 2017
Robert F. Probst

/s/ GREGORY R. LIEBBE	Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)	February 13, 2017
Gregory R. Liebbe

/s/ MELODY C. BARNES	Director	February 13, 2017
Melody C. Barnes

/s/ JAY M. GELLERT	Director	February 13, 2017
Jay M. Gellert

/s/ RICHARD I. GILCHRIST	Director	February 13, 2017
Richard I. Gilchrist

/s/ MATTHEW J. LUSTIG	Director	February 13, 2017
Matthew J. Lustig

/s/ ROXANNE M. MARTINO	Director	February 13, 2017
Roxanne M. Martino

/s/ DOUGLAS M. PASQUALE	Director	February 13, 2017
Douglas M. Pasquale

/s/WALTER C. RAKOWICH	Director	February 13, 2017
Walter C. Rakowich

/s/ ROBERT D. REED	Director	February 13, 2017
Robert D. Reed

/s/ GLENN J. RUFRANO	Director	February 13, 2017
Glenn J. Rufrano

/s/ JAMES D. SHELTON	Director	February 13, 2017
James D. Shelton

196

EXHIBIT INDEX



Exhibit Number	Description of Document	Location of Document
2.1	Separation and Distribution Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 2.1 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

3.1	Amended and Restated Certificate of Incorporation, as amended, of Ventas, Inc.	Incorporated by reference herein. Previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 5, 2011, File No. 001-10989.

3.2	Fifth Amended and Restated Bylaws, as amended, of Ventas, Inc.	Incorporated by reference herein. Previously filed as Exhibit 3.2 to our Current Report on Form 8-K, filed on January 11, 2017, File No. 001-10989.

4.1	Specimen common stock certificate.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed on February 12, 2016, File No. 001-10989.

4.2	Indenture dated as of September 19, 2006 by and among Ventas, Inc., Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuer(s), the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.9 to our Registration Statement on Form S-3, filed on April 7, 2006, File No. 333-133115.

4.3	Fourth Supplemental Indenture dated as of May 17, 2011 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.750% Senior Notes due 2021.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on May 20, 2011, File No. 001-10989.

4.4	Fifth Supplemental Indenture dated as of February 10, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.250% Senior Notes due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on February 14, 2012, File No. 001-10989.

4.5	Sixth Supplemental Indenture dated as of April 17, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.000% Senior Notes due 2019.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 18, 2012, File No. 001-10989.

4.6	Seventh Supplemental Indenture dated as of August 3, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on October 26, 2012, File No. 001-10989.

4.7	Eighth Supplemental Indenture dated as of December 13, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 2.000% Senior Notes due 2018.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on December 13, 2012, File No. 001-10989.

4.8	Ninth Supplemental Indenture dated as of March 7, 2013 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.450% Senior Notes due 2043.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Registration Statement on Form 8-A, filed on March 7, 2013, File No. 001-10989.

197



Exhibit Number	Description of Document	Location of Document
4.9	Tenth Supplemental Indenture dated as of March 19, 2013 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 2.700% Senior Notes due 2020.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on March 19, 2013, File No. 001-10989.

4.10	Indenture dated as of September 26, 2013 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.	Filed herewith.

4.11	Second Supplemental Indenture dated as of September 26, 2013 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.700% Senior Notes due 2043.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on September 26, 2013, File No. 001-10989.

4.12	Third Supplemental Indenture dated as of April 17, 2014 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 1.250% Senior Notes due 2017.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 17, 2014, File No. 001-10989.

4.13	Fourth Supplemental Indenture dated as of April 17, 2014 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.750% Senior Notes due 2024.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 17, 2014, File No. 001-10989.

4.14	Fifth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.500% Senior Notes due 2025.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.

4.15	Sixth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.375% Senior Notes due 2045.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.

4.16	Indenture dated as of August 19, 1997 by and between Nationwide Health Properties, Inc. and The Bank of New York, as Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038.	Incorporated by reference herein. Previously filed as Exhibit 1.2 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on August 19, 1997, File No. 001-09028.

4.17	Supplemental Indenture dated July 1, 2011 among Nationwide Health Properties, Inc., Needles Acquisition LLC, and The Bank of New York Mellon Trust Company, N.A., as successor Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038.	Filed herewith.

4.18	Indenture dated as September 24, 2014 by and among Ventas, Inc., Ventas Canadian Finance Limited, the Guarantors parties thereto from time to time and Computershare Trust Company of Canada, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

4.19	First Supplemental Indenture dated as of September 24, 2014 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 3.00% Senior Notes, Series A due 2019.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

198



Exhibit Number	Description of Document	Location of Document
4.20	Second Supplemental Indenture dated as of September 24, 2014 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 4.125% Senior Notes, Series B due 2024.	Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.

4.21	Third Supplemental Indenture dated as of January 13, 2015 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 3.30% Senior Notes, Series C due 2022.	Incorporated by reference herein. Previously filed as Exhibit 4.24 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.

4.22	Indenture dated as of July 16, 2015 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein as Guarantors, and U.S. Bank National Association, as Trustee.	Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.

4.23	First Supplemental Indenture dated as of July 16, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.125% Senior Notes due 2026.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.

4.24	Second Supplemental Indenture dated as of June 2, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.125% Senior Notes due 2023.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on June 2, 2016, File No. 001-10989.

4.25	Third Supplemental Indenture dated as of September 21, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2026.	Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on September 21, 2016, File No. 001-10989.

10.1	First Amended and Restated Agreement of Limited Partnership of Ventas Realty, Limited Partnership.	Incorporated by reference herein. Previously filed as Exhibit 3.5 to our Registration Statement on Form S-4, as amended, filed on May 29, 2002, File No. 333-89312.

10.2	Amended and Restated Credit and Guaranty Agreement, dated as of December 9, 2013, among Ventas Realty, Limited Partnership, Ventas SSL Ontario II, Inc. and Ventas SSL Ontario III, Inc., as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and Alternative Currency Fronting Lender.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on December 11, 2013, File No. 001-10989.

10.4	Second Amendment and Joinder dated as of October 14, 2015 to that certain Amended and Restated Credit and Guaranty Agreement by and among Ventas Realty, Limited Partnership, Ventas Canada Finance Limited, Ventas UK Finance, Inc., Ventas Euro Finance, LLC, Ventas SSL Ontario II, Inc. and Ventas SSL Ontario III, Inc., as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, Swing Line Lender L/C Issuer and Alternative Currency Fronting Lender.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on October 19, 2015, File No. 001-10989.

10.5	Tax Matters Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

199



Exhibit Number	Description of Document	Location of Document
10.6	Employee Matters Agreement dated as of August 17, 2015 by and between Ventas, Inc. and Care Capital Properties, Inc.	Incorporated by reference herein. Previously filed as Exhibit 10.3 to our Current Report on Form 8-K, filed on August 21, 2015, File No. 001-10989.

10.7*	Ventas, Inc. 2004 Stock Plan for Directors, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.16.1 to our Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 1, 2005, File No. 33-107942.

10.8.1*	Ventas, Inc. 2006 Incentive Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.10.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.8.2*	Form of Stock Option Agreement—2006 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.

10.8.3*	Form of Restricted Stock Agreement—2006 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.15.3 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.

10.9.1*	Ventas, Inc. 2006 Stock Plan for Directors, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.

10.9.2*	Form of Stock Option Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.11.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.9.3*	Form of Amendment to Stock Option Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.

10.9.4*	Form of Restricted Stock Unit Agreement—2006 Stock Plan for Directors.	Incorporated by reference herein. Previously filed as Exhibit 10.11.4 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.10.1*	Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on May 23, 2012, File No. 001-10989.

10.10.2*	Form of Stock Option Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6.2 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed February 13, 2015, File No. 001-10989.

10.10.3*	Form of Restricted Stock Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6.3 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.

10.10.4*	Form of Stock Option Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.4 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

10.10.5*	Form of Restricted Stock Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.5 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

10.10.6*	Form of Restricted Stock Unit Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.6 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.

200



Exhibit Number	Description of Document	Location of Document
10.11.1*	Ventas Executive Deferred Stock Compensation Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.12.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.11.2*	Deferral Election Form under the Ventas Executive Deferred Stock Compensation Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.12.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.12.1*	Ventas Nonemployee Directors’ Deferred Stock Compensation Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.13.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.12.2*	Deferral Election Form under the Ventas Nonemployee Directors’ Deferred Stock Compensation Plan.	Incorporated by reference herein. Previously filed as Exhibit 10.13.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.13.1*	Nationwide Health Properties, Inc. 2005 Performance Incentive Plan.	Incorporated by reference herein. Previously filed as Appendix B to the Nationwide Health Properties, Inc. definitive Proxy Statement for the 2005 Annual Meeting, filed on March 24, 2005, File No. 001-09028.

10.13.2*	First Amendment to the Nationwide Health Properties, Inc. 2005 Performance Incentive Plan, dated October 28, 2008.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on November 3, 2008, File No. 001-09028.

10.14.1*	Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to the Nationwide Health Properties, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed on May 4, 2006, File No. 001-09028.

10.14.2*	Amendment dated October 28, 2008 to the Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006.	Incorporated by reference herein. Previously filed as Exhibit 10.9 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on November 3, 2008, File No. 001-09028.

10.15*	Second Amended and Restated Employment Agreement dated as of March 22, 2011 between Ventas, Inc. and Debra A. Cafaro.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on March 24, 2011, File No. 001-10989.

10.16.1*	Employment Agreement dated as of July 31, 1998 between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2.1 to our Annual Report on Form 10-K for the year ended December 31, 2002, filed on February 26, 2003, File No. 001-10989.

10.16.2*	Amendment dated as of September 30, 1999 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.2.2 to our Annual Report on Form 10-K for the year ended December 31, 2002, filed on February 26, 2003, File No. 001-10989.

10.16.3*	Amendment dated as of March 19, 2007 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on March 23, 2007, File No. 001-10989.

10.16.4*	Amendment dated as of December 31, 2008 to Employment Agreement between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.15.4 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

10.16.5*	Amended and Restated Change-in-Control Severance Agreement dated as of March 22, 2011 between Ventas, Inc. and T. Richard Riney.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on March 24, 2011, File No. 001-10989.

201



Exhibit Number	Description of Document	Location of Document
10.17*	Employment Agreement dated as of June 22, 2010 between Ventas, Inc. and Todd W. Lillibridge.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, filed on July 30, 2010, File No. 001-10989.

10.18*	Employee Protection and Noncompetition Agreement dated as of October 21, 2013 between Ventas, Inc. and John D. Cobb.	Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014, File No. 001-10989.

10.19.1*	Offer Letter dated September 16, 2014 from Ventas, Inc. to Robert F. Probst.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.

10.19.2*	Employee Protection and Noncompetition Agreement dated September 16, 2014 between Ventas, Inc. and Robert F. Probst.	Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.

10.20*	Employee Protection and Noncompetition Agreement dated June 17, 2015 between Ventas, Inc. and Todd W. Lillibridge.	Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on June 23, 2015, File No. 001-10989.

10.21*	Ventas Employee and Director Stock Purchase Plan, as amended.	Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.

12	Statement Regarding Computation of Ratios of Earnings to Fixed Charges.	Filed herewith.

21	Subsidiaries of Ventas, Inc.	Filed herewith.

23	Consent of KPMG LLP.	Filed herewith.

31.1	Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(a) under the Exchange Act.	Filed herewith.

31.2	Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) under the Exchange Act.	Filed herewith.

32.1	Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350.	Filed herewith.

32.2	Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350.	Filed herewith.

101	Interactive Data File.	Filed herewith.

* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.

202

ITEM 16. Form 10-K Summary

None.

203

Ventas, Inc.,

Ventas Realty, Limited Partnership,

and each of the Guarantors named herein

INDENTURE

Dated as of September 26, 2013

Senior Debt Securities

U.S. Bank National Association,

Trustee

CROSS-REFERENCE TABLE*



Trust Indenture Act Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	2.06
(b)	13.03
(c)	13.03
313(a)	2.06, 7.06
(b)(2)	7.06; 7.07
(c)	4.03, 7.06; 13.02
(d)	7.06
314(a)(4)	13.05
(c)(1)	N.A.
(c)(2)	N.A.
(c)(3)	N.A.
(e)	13.05
(f)	N.A.
315(a)	2.03
(b)	2.03
(c)	2.03
(d)	2.03
(e)	N.A.
316(a) (last sentence)	N.A.
(a)(1)(A)	N.A.
(a)(1)(B)	N.A.
(a)(2)	N.A.
(b)	N.A.
(c)	13.16
317(a)(1)	N.A.
(a)(2)	N.A.
(b)	N.A.
318(a)	N.A.
(b)	N.A.
(c)	13.01

N.A. means not applicable.

* This Cross Reference Table is not part of this Indenture.

TABLE OF CONTENTS



		Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.01	Definitions	1
Section 1.02	Other Definitions	9
Section 1.03	Incorporation by Reference of Trust Indenture Act	9
Section 1.04	Rules of Construction	9

ARTICLE 2 THE SECURITIES		10
Section 2.01	Form, Dating and Denominations.	10
Section 2.02	Amount Unlimited; Issuable in Series.	11
Section 2.03	Execution and Authentication.	14
Section 2.04	Registrar and Paying Agent.	15
Section 2.05	Paying Agent to Hold Money in Trust.	16
Section 2.06	Holder Lists.	16
Section 2.07	Transfer and Exchange.	16
Section 2.08	Replacement Securities.	21
Section 2.09	Outstanding Securities.	21
Section 2.10	Treasury Securities.	22
Section 2.11	Temporary Securities.	23
Section 2.12	Cancellation.	23
Section 2.13	Defaulted Interest.	23

ARTICLE 3 REDEMPTION AND PREPAYMENT		24
Section 3.01	Applicability of Article.	24
Section 3.02	Notices to Trustee.	24
Section 3.03	Selection of Securities to Be Redeemed.	24
Section 3.04	Notice of Redemption.	25
Section 3.05	Effect of Notice of Redemption.	26
Section 3.06	Deposit of Redemption or Purchase Price.	26
Section 3.07	Securities Redeemed or Purchased in Part.	27
Section 3.08	Conversion Arrangement on Call for Redemption.	27

ARTICLE 4 COVENANTS		28
Section 4.01	Payment of Securities.	28
Section 4.02	Maintenance of Office or Agency.	28
Section 4.03	Reports.	29
Section 4.04	Compliance Certificate.	29
Section 4.05	Additional Amounts.	30
Section 4.06	Corporate Existence.	31



ARTICLE 5 SUCCESSORS		31
Section 5.01	Merger, Consolidation, or Sale of Assets.	31
Section 5.02	Successor Substituted.	32

ARTICLE 6 DEFAULTS AND REMEDIES		33
Section 6.01	Events of Default.	33
Section 6.02	Acceleration.	34
Section 6.03	Other Remedies.	35
Section 6.04	Waiver of Past Defaults.	35
Section 6.05	Control by Majority.	35
Section 6.06	Limitation on Suits.	35
Section 6.07	Rights of Holders of Securities to Receive Payment.	36
Section 6.08	Collection Suit by Trustee.	36
Section 6.09	Trustee May File Proofs of Claim.	36
Section 6.10	Priorities.	37
Section 6.11	Undertaking for Costs.	37

ARTICLE 7 TRUSTEE		38
Section 7.01	Duties of Trustee.	38
Section 7.02	Rights of Trustee.	39
Section 7.03	Individual Rights of Trustee.	39
Section 7.04	Trustee’s Disclaimer.	40
Section 7.05	Notice of Defaults.	40
Section 7.06	Reports by Trustee to Holders of the Securities.	40
Section 7.07	Compensation and Indemnity.	40
Section 7.08	Replacement of Trustee.	41
Section 7.09	Successor Trustee by Merger, etc.	43
Section 7.10	Eligibility; Disqualification.	43
Section 7.11	Preferential Collection of Claims Against Issuer.	44

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE		44
Section 8.01	Applicability of Article; Option to Effect Legal Defeasance or Covenant Defeasance.	44
Section 8.02	Legal Defeasance and Discharge.	44
Section 8.03	Covenant Defeasance.	45
Section 8.04	Conditions to Legal or Covenant Defeasance.	45
Section 8.05	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.	47
Section 8.06	Repayment to Issuer.	47
Section 8.07	Reinstatement.	48

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER		49
Section 9.01	Without Consent of Holders of Securities.	49



Section 9.02	With Consent of Holders of Securities.	50
Section 9.03	Compliance with Trust Indenture Act.	52
Section 9.04	Revocation and Effect of Consents.	52
Section 9.05	Notation on or Exchange of Securities.	52
Section 9.06	Trustee to Sign Amendments, etc.	52

ARTICLE 10 SECURITIES GUARANTEES		53
Section 10.01	Applicability of Article; Securities Guarantee.	53
Section 10.02	Limitation on Guarantor Liability.	54
Section 10.03	Execution and Delivery of Securities Guarantee.	54
Section 10.04	Guarantors May Consolidate, etc., on Certain Terms.	55

ARTICLE 11 SATISFACTION AND DISCHARGE		56
Section 11.01	Satisfaction and Discharge.	56
Section 11.02	Application of Trust Money.	57

ARTICLE 12 CONVERSION OF SECURITIES		57
Section 12.01	Applicability of Article.	57
Section 12.02	Right of Holders to Convert Securities into Common Stock.	58
Section 12.03	Issuance of Shares of Common Stock on Conversions.	58
Section 12.04	No Payment or Adjustment for Interest or Dividends.	59
Section 12.05	Adjustment of Conversion Price.	60
Section 12.06	No Fractional Shares to be Issued.	63
Section 12.07	Preservation of Conversion Rights Upon Consolidation, Merger, Sale or Conveyance.	63
Section 12.08	Notice to Holders of the Securities of a Series Prior to Taking Certain Types of Action.	64
Section 12.09	Covenants to Reserve Shares for Issuance on Conversion of Securities.	65
Section 12.10	Compliance with Governmental Requirements.	65
Section 12.11	Payment of Taxes upon Certificates for Shares Issued upon Conversion.	65
Section 12.12	Trustee’s Duties with Respect to Conversion Provisions.	66

ARTICLE 13 MISCELLANEOUS		66
Section 13.01	Trust Indenture Act Controls.	66
Section 13.02	Notices.	66
Section 13.03	Communication by Holders of Securities with Other Holders of Securities.	67
Section 13.04	Certificate and Opinion as to Conditions Precedent.	68
Section 13.05	Statements Required in Certificate or Opinion.	68
Section 13.06	Rules by Trustee and Agents.	68

iii



Section 13.07	No Personal Liability of Directors, Officers, Employees and Stockholders.	69
Section 13.08	Governing Law.	69
Section 13.09	No Adverse Interpretation of Other Agreements.	69
Section 13.10	Successors.	69
Section 13.11	Severability.	69
Section 13.12	Counterpart Originals.	69
Section 13.13	Table of Contents, Headings, etc.	69
Section 13.14	Benefits of Indenture.	70
Section 13.15	Legal Holidays.	70
Section 13.16	Acts of Holders.	70


SCHEDULES
Schedule I	GUARANTORS

INDENTURE dated as of September 26, 2013 among Ventas, Inc., a Delaware corporation, Ventas Realty, Limited Partnership, a Delaware limited partnership (the “ Partnership ”), the Guarantors (as defined) parties hereto from time to time and U.S. Bank National Association, as trustee (the “ Trustee ”).

Ventas, Inc., as a sole issuer, or the Partnership, as a sole issuer (as applicable, the “Issuer”), deems it necessary to issue from time to time for its lawful purposes senior debt securities (the “ Securities ”) evidencing its unsecured and unsubordinated indebtedness, and has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of the Securities, unlimited as to principal amount, to bear interest at such rate or pursuant to such formula, to mature at such times and to have such other provisions, including the benefit of guarantees, as shall be fixed as hereinafter provided.

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions.

“Additional Amounts” means, when used with respect to a Security of a series issued with the benefits provided by Section 4.05, as specified as contemplated by Section 2.02, all additional interest then owing pursuant to said Section 4.05 and the Board Resolution or indenture supplemental hereto under which such Security shall be issued.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings. No Person (other than Ventas, Inc. or any of its Restricted Subsidiaries) in whom a special purpose entity makes an investment in connection with a Qualified CMBS Transaction will be deemed to be an Affiliate of Ventas, Inc. or any of its Restricted Subsidiaries solely by reason of such investment.

“ Agent ” means any Registrar, co-registrar, Paying Agent or additional paying agent.

“ Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Security, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“ Authorized Newspaper ” means a newspaper, printed in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Whenever successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different Authorized Newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

“ Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

“ Board of Directors ” means:

(1) with respect to a corporation, the Board of Directors of the corporation;

(2) with respect to a partnership, the Board of Directors of the general partner of the partnership or the board or committee of the general partner of the partnership serving a similar function; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

“ Board Resolutions ” means a copy of resolutions certified by the Secretary or an Assistant Secretary of Ventas, Inc. or the general partner of the Partnership, as applicable, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“ Business Day ” means, when used with respect to any Place of Payment or any other particular location referred to in this Indenture or in the Securities, unless otherwise specified with respect to any Securities as contemplated by Section 2.02, any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in that Place of Payment or particular location are authorized or required by law, regulation or executive order to close.

“ Capital Stock ” means, with respect to any entity, any capital stock (including preferred stock), shares, interests, participation or other ownership interests (however designated) of such entity and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase any thereof; provided , however , that leases of real property that provide for contingent rent based on the financial performance of the tenant shall not be deemed to be Capital Stock.

“ Capitalized Lease Obligation ” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

“ Clearstream ” means Clearstream Banking, S.A., or its successor.

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock ” means the common stock, $0.25 par value, of Ventas, Inc.

“ Corporate Trust Office of the Trustee ” will be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Issuer.

“ Custodian ” means the Trustee, as custodian with respect to the Securities in global form, or any successor entity thereto.

“ Debt ” of Ventas, Inc. or any of its Restricted Subsidiaries means, without duplication, any indebtedness of Ventas, Inc. or any Restricted Subsidiary, whether or not contingent, in respect of:

(1) borrowed money or evidenced by bonds, notes, debentures or similar instruments;

(2) indebtedness for borrowed money secured by any encumbrance existing on property owned by Ventas, Inc. or its Restricted Subsidiaries, to the extent of the lesser of ( x ) the amount of indebtedness so secured or ( y ) the Fair Market Value of the property subject to such encumbrance;

(3) the reimbursement obligations in connection with any letters of credit actually drawn or amounts representing the balance deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense, trade payable, conditional sale obligations or obligations under any title retention agreement;

(4) the principal amount of all obligations of Ventas, Inc. and its Restricted Subsidiaries with respect to redemption, repayment or other repurchase of any Disqualified Stock;

(5) any lease of property by Ventas, Inc. or any of its Restricted Subsidiaries as lessee which is reflected on Ventas, Inc.’s or such Restricted Subsidiaries’ consolidated balance sheet as a Capitalized Lease Obligation,

to the extent, in the case of items of indebtedness under clauses (1) through (5) above, that any such items would appear as a liability on Ventas, Inc.’s or such Restricted Subsidiaries’ consolidated balance sheet in accordance with GAAP; or

(6) the liquidation preference of any Disqualified Stock of Ventas, Inc. or of any shares of preferred stock of any of its Restricted Subsidiaries.

Debt also includes, to the extent not otherwise included, any obligation by Ventas, Inc. and its Restricted Subsidiaries to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), Debt of another Person (other than Ventas, Inc. or any of its Restricted Subsidiaries); it being understood that Debt shall be deemed to be incurred by Ventas, Inc. or any of its Restricted Subsidiaries whenever Ventas, Inc. or such Restricted Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof; provided , however , that a Person shall not be deemed to have incurred Debt (or be liable with respect to such Debt) by virtue of Standard Securitization Undertakings.

Debt shall not include ( a ) Debt arising from agreements of Ventas, Inc. or any Restricted Subsidiary providing for indemnification, adjustment or holdback of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Debt incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition or ( b ) contingent obligations under performance bonds, performance guarantees, surety bonds, appeal bonds or similar obligations incurred in the ordinary course of business and consistent with past practices. In the case of Debt as of any date issued with original issue discount, the amount of such Debt shall be the accreted value thereof as of such date.

“ Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“ Definitive Security ” means a certificated Security registered in the name of the Holder thereof and issued in accordance with Section 2.07, substantially in the form established in one or more indentures supplemental hereto or pursuant to Board Resolutions in accordance with Section 2.02 except that such Security shall not bear the Global Security Legend and shall not have any related schedule of exchanges of interests in the global security attached thereto.

“ Depositary ” means, with respect to the Securities issuable or issued in whole or in part in global form, the Person specified in Section 2.04 hereof as the Depositary with respect to the Securities, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

“ Disqualified Stock ”, when used with respect to Securities of any series, shall have the meaning given to such term in the Board Resolution or indenture supplemental hereto pursuant to which the Securities of that series shall be issued.

“ Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“ Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear system, or its successor.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) which could be negotiated in an arm’s-length free market transaction between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of Ventas, Inc. in good faith.

“ Foreign Currency ” means any currency, currency unit or composite currency issued by the government of one or more countries other than the United States of America or by any recognized confederation or association of such governments.

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of determination.

“ Global Security ” means a permanent global Security substantially in the form of established by one or more indentures supplemental hereto or pursuant to Board Resolutions in accordance with Section 2.02 that bears the Global Security Legend and that has a schedule of exchanges of interests in the Global Security attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary.

“ Global Security Legend ” means the legend set forth in Section 2.07(f), which is required to be placed on all Global Securities issued under this Indenture.

“ Government Obligations ” means securities which are ( 1 ) direct obligations of the United States of America or the government which issued the Foreign Currency in which the Securities of a particular series are payable, for the payment of which its full faith and credit is pledged or ( 2 ) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such government which issued the Foreign Currency in which the Securities of that series are payable, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America or such other government, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt.

“ Guarantee ” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner

including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Debt.

“ Guarantors ” means, when used with respect to a Security of a series issued with the benefit of Securities Guarantees as specified as contemplated by Section 2.02, (i) each of the Persons listed on Schedule I hereto that becomes a guarantor of such Security in compliance with the provisions of Section 10.03 of this Indenture and (ii) each Person executing a supplemental indenture after the date hereof in which such Person agrees to be bound by the terms of this Indenture and (iii) in each case, their respective successors and assigns; provided , however , that any Person constituting a Guarantor as described herein shall cease to constitute a Guarantor when its Securities Guarantee is released in accordance with the terms of this Indenture.

“ Holder ” means a Person in whose name a Security is registered.

“ incur ” means issue, create, assume, guarantee, incur or otherwise become liable for; provided , however, that any Debt or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be incurred by such Subsidiary at the time it becomes a Restricted Subsidiary. Neither the accrual of interest nor the accretion of original issue discount shall be deemed to be an incurrence of Debt. The term “incurrence” when used as a noun shall have a correlative meaning.

“ Indenture ” means this Indenture, as amended or supplemented from time to time by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, and shall include the terms of particular series of Securities established as contemplated by Section 2.02; provided, however , that, if at any time more than one Person is acting as Trustee under this instrument, “Indenture” shall mean, with respect to any one or more series of Securities for which such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of the or those particular series of Securities for which such Person is Trustee established as contemplated by Section 2.02, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a party.

“ Indexed Security ” means a Security the terms of which provide that the principal amount thereof payable at maturity may be more or less than the principal face amount thereof at original issuance.

“ Indirect Participant ” means a Person who holds a beneficial interest in a Global Security through a Participant.

“ interest ” means, when used with respect to an Original Issue Discount Security which by its terms bears interest only after maturity, interest payable after maturity, and, when used with respect to a Security which provides for the payment of Additional Amounts, includes such Additional Amounts.

“ Interest Payment Date ” has the meaning set forth in the Securities.

“ Issuer ” means, when used with respect to Securities of any series, either ( a ) Ventas, Inc. or ( b ) Ventas Realty, Limited Partnership, and in each case any and all respective successors thereto, as applicable.

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and, except in connection with any Qualified CMBS Transaction, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“ Non-Recourse Debt ” means Debt:

(1) as to which neither Ventas, Inc. nor any of its Restricted Subsidiaries ( a ) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Debt), other than pursuant to Standard Securitization Undertakings, ( b ) is directly or indirectly liable as a guarantor or otherwise, other than pursuant to Standard Securitization Undertakings, or ( c ) constitutes the lender;

(2) no default with respect to which (including any rights that the holders of the Debt may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Debt (other than the Securities) of Ventas, Inc. or any of its Restricted Subsidiaries to declare a default on such other Debt or cause the payment of the Debt to be accelerated or payable prior to its stated maturity; and

(3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of Ventas, Inc. or any of its Restricted Subsidiaries, other than pursuant to Standard Securitization Undertakings.

“ Officer ” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Investment Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

“ Officers’ Certificate ” means a certificate signed on behalf of the Issuer by two Officers of the Issuer, one of whom must be the principal executive officer, the principal

financial officer, the principal investment officer, the treasurer or the principal accounting officer of the Issuer or a general partner of the Issuer, that meets the requirements of Section 2.03, 8.04 or 13.05, as applicable.

“ Opinion of Counsel ” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 2.03, 8.04 or 13.05, as applicable. The counsel may be an employee of or counsel to the Issuer, Ventas, Inc., any Subsidiary of the Issuer or the Trustee.

“ Original Issue Discount Security ” means any security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02.

“ Outstanding ”, when used with respect to Securities of a series, shall have the meaning ascribed thereto in Section 2.09.

“ Participant ” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“ Partnership ” means Ventas Realty, Limited Partnership.

“ Person ” means any individual, corporation, partnership, joint venture, real estate investment trust, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“ Place of Payment ” means, when used with respect to the Securities of or within any series, the place or places where the principal of (and premium, if any) and interest on such Securities are payable as specified as contemplated by Section 2.02.

“ Qualified CMBS Transaction ” means any transaction or series of transactions entered into by Ventas, Inc. or any of its Restricted Subsidiaries pursuant to which Ventas, Inc. or any of its Restricted Subsidiaries sells, conveys or otherwise transfers to an Unrestricted Subsidiary, or grants a security interest in, any Real Estate Assets or mortgage receivables (whether now existing or arising in the future) of Ventas, Inc. or any of its Restricted Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such Real Estate Assets or mortgage receivables, all contracts and all guarantees or other obligations in respect of such Real Estate Assets or mortgage receivables, proceeds of such Real Estate Assets or mortgage receivables and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving Real Estate Assets or mortgage receivables.

“ Real Estate Assets ” means, as of any date, the real estate assets of such Person and its Restricted Subsidiaries on such date, on a consolidated basis determined in accordance with GAAP.

“ Record Date ” has the meaning set forth in the Securities.

“ Responsible Officer, ” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“ Restricted Subsidiary ” of a Person means any Subsidiary of the referenced Person that is not an Unrestricted Subsidiary.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Securities Guarantee ” means the Guarantee by each Guarantor of the Issuer’s payment obligations under this Indenture and on the Securities, executed pursuant to the provisions of this Indenture.

“ Security ” has the meaning stated in the preamble to this Indenture and, more particularly, means any Security or Securities authenticated and delivered under this Indenture; provided, however , that if at any time there is more than one Person acting as Trustee under this Indenture, “ Securities ” with respect to this Indenture as to which such Person is Trustee shall have the meaning stated in the preamble to this Indenture and shall more particularly mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not Trustee.

“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02(w) of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.

“ Standard Securitization Undertakings ” means representations, warranties, covenants and indemnities entered into by Ventas, Inc. or any Restricted Subsidiary which are reasonably customary in Qualified CMBS Transactions by the parent or sponsoring entity.

“ Subsidiary ” means, for any Person, any corporation or other entity of which a majority of the Voting Stock is owned, directly or indirectly, by such Person or one or more other Subsidiaries of such Person.

“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended, as in effect on the date on which this Indenture is qualified under the TIA.

“ Trustee ” means the Person named as the “ Trustee ” in the preamble to this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Trustee ” shall mean or include each Person who is then a Trustee hereunder; provided , however , that if at any time there is more than one such Person,

“ Trustee ” as used with respect to the Securities of any series shall mean only the Trustee with respect to Securities of that series.

“ Unrestricted Subsidiary ” means ( i ) Ventas Kansas City I, LLC, Ventas Farmington Hills, LLC, Ventas Regency Medical Park I, LLC, ET Heritage Andover Finance, Inc., ET Sub-Cabot Park, L.L.C., ET Sub-Vernon Court, L.L.C., ET Sub-Cleveland Circle, L.L.C., ET Sub-Heritage Andover, L.L.C., ET DCMH Finance, Inc., ET POBI Finance, Inc., ET Belvedere Finance, Inc., ET DCMH Finance, L.L.C., ET POBI Finance, L.L.C., ET Belvedere Finance, L.L.C., ET Sub-DCMH Limited Partnership, L.L.P., ET Sub-POB I Limited Partnership, L.L.P., ET Sub-Belvedere Limited Partnership, L.L.P., Ventas Fairwood, LLC, Ventas Whitehall Estates, LLC, Ventas Bayshore Medical, , LLC, Ventas Brighton, LLC, Ventas Amberleigh, LLC, Ventas Harrison, LLC, Ventas West Shores, LLC, Ventas Santa Barbara, LLC, Ventas Georgetowne, LLC, Ventas Rose Arbor, LLC, Brookdale Living Communities of Illinois-HV, LLC, Brookdale Living Communities of Connecticut, LLC, BLC of Indiana-OL, L.P., Brookdale Living Communities of Florida-CL, LLC, Brookdale Living Communities of New Jersey, LLC, Brookdale Living Communities of Connecticut-WH, LLC, Brookdale Living Communities of New Mexico-SF, LLC, DBF Issuer I, LLC, BLC Issuer II, LLC, Brookdale Living Communities of Illinois-Hoffman Estates, LLC, PSLT-ALS Properties II, LLC and ( ii ) any Subsidiary of Ventas, Inc. or any successor to any of them, other than the Partnership and Ventas Capital Corporation, that is designated by the Board of Directors of Ventas, Inc. as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that such Subsidiary:

(1) has no Debt other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with Ventas, Inc. or any of its Restricted Subsidiaries unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Ventas, Inc. or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Ventas, Inc.;

(3) is a Person with respect to which neither Ventas, Inc. nor any of its Restricted Subsidiaries has any direct or indirect obligation ( a ) to subscribe for additional Equity Interests or ( b ) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Debt of Ventas, Inc. or any of its Restricted Subsidiaries, other than pursuant to Standard Securitization Undertakings; and

(5) has at least one director on its Board of Directors that is not a director or executive officer of Ventas, Inc. or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of Ventas, Inc. or any of its Restricted Subsidiaries.

Any designation of a Subsidiary of Ventas, Inc. as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of the board resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by all restrictions, if any, on investments by Ventas, Inc. set forth in each indenture supplemental hereto as specified as contemplated by Section 2.02. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Debt of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Ventas, Inc., as of such date and, if such Debt is not permitted to be incurred as of such date by one or more supplemental indentures hereto, Ventas, Inc. will be in default under this Indenture.

“ Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Section 1.02 Other Definitions.



Term	Defined in Section
“ Authentication Order ”	2.03
“ Covenant Defeasance ”	8.03
“ DTC ”	2.04
“ Event of Default ”	6.01
“ Legal Defeasance ”	8.02
“ NASDAQ ”	12.05(e)
“ Paying Agent ”	2.04
“ Registrar ”	2.04
“ Special Securities ”	12.05(c)
“ Trading Day ”	12.05(e)

Section 1.03 Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“ indenture securities ” means the Securities;

“ indenture security holder ” means a Holder of a Security;

“ indenture to be qualified ” means this Indenture;

“ indenture trustee ” or “ institutional trustee ” means the Trustee; and

“ obligor ” on the Securities and the Securities Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Securities and the Securities Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them.

Section 1.04 Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) words in the singular include the plural, and in the plural include the singular;

(5) “will” shall be interpreted to express a command;

(6) provisions apply to successive events and transactions; and

(7) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the Commission from time to time.

ARTICLE 2

THE SECURITIES

Section 2.01 Form, Dating and Denominations.

(a) General. The Securities of each series will be substantially in such forms as shall be established in one or more indentures supplemental hereto or approved from time to time by or pursuant to Board Resolutions in accordance with Section 2.02, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or any indenture supplemental hereto, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements placed thereon as the Issuer may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Securities may be listed, or to conform to usage. Each Security will be dated the date of its authentication. Except

as specified as contemplated by Section 2.02 in respect of Securities of any series, the Securities shall be in denominations of $1,000 and integral multiples thereof.

The terms and provisions contained in the Securities will constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Security conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

(b) Form of Trustee’s Certificate of Authentication. Subject to Section 2.03, the Trustee’s certificate of authentication shall be in substantially the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

By:
Authorized Signatory

(c) Global Securities. If Securities of or within a series are issued in global form, as specified as contemplated by Section 2.02, then, notwithstanding the provisions of paragraph (a) of this Section 2.01 and clause (9) of Section 2.02, any such Security shall represent such of the Outstanding Securities of that series as shall be specified therein and shall include the Global Securities Legend and a related schedule of exchanges of interests in the Global Securities attached thereto. Securities issued in definitive form will not include such legend or schedule. Each Global Security may provide that it shall represent the Outstanding Securities as will be specified therein and each shall provide that it represents the aggregate principal amount of Outstanding Securities from time to time endorsed thereon and that the aggregate principal amount of Outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount of Outstanding Securities represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.07 hereof.

Section 2.02 Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be established in one or more Board Resolutions or pursuant to authority granted by one or more Board Resolutions and, subject to Section 2.03, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, any or all of the following, as applicable (each of which (except for the matters set forth in clauses (1), (2), (3) and (14) below), if so provided, may be determined from time to time by the Issuer with respect to unissued Securities of the series when issued from time to time):

(1) the identity of the Issuers and Guarantors, if any, of the Securities of the series and the terms and conditions, if any, in addition to those provided in Article 10 upon which such Guarantors may be released;

(2) the title of the Securities of the series (which shall distinguish the Securities of that series from all other series of Securities);

(3) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.07, 2.08, 2.11, 3.07 or 9.05);

(4) the date or dates, or the method by which such date or dates will be determined or extended, on which the principal of the Securities of the series shall be payable;

(5) the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate or rates shall be determined, the date or dates from which such interest shall accrue or the method by which such date or dates shall be determined, the interest payment dates on which such interest will be payable, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months;

(6) the place or places, if any, other than or in addition to the Borough of Manhattan, The City of New York, where the principal of (and premium, if any), interest, if any, on, and Additional Amounts, if any, payable in respect of, Securities of the series shall be payable, Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered for exchange or conversion and notices or demands to or upon the Issuer in respect of the Securities of the series and this Indenture may be served;

(7) the period or periods within which, the price or prices at which, and other terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, if the Issuer is to have the option;

(8) the obligation, if any, of the Issuer to redeem, repay or purchase Securities of the series pursuant to any sinking fund or analogous provision or at the option of a

Holder thereof, and the period or periods within which or the date or dates on which, the price or prices at which, and other terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation;

(9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable;

(10) the identity of the Trustee, if other than U.S. Bank National Association, and the identity of each Registrar and/or Paying Agent, if other than the Trustee;

(11) if other than the principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02 or, if applicable, the portion of the principal amount of Securities of the series that is convertible in accordance with the provisions of this Indenture or the method by which such portion shall be determined;

(12) whether the amount of payments of principal of (and premium, if any) or interest, if any, on the Securities of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more currencies, currency units, composite currencies, commodities, equity indices or other indices), and the manner in which such amounts shall be determined;

(13) provisions, if any, granting special rights to the Holders of Securities of the series upon the occurrence of such events as may be specified;

(14) any deletions from, modifications of or additions to the Events of Default or covenants of the Issuer with respect to Securities of the series, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein;

(15) whether any Securities of the series are to be issuable initially in temporary global form and the date as of which any temporary global Security representing Outstanding Securities of the series shall be dated if other than the date of original issuance of the first Security of the series to be issued, and whether any Securities of the series are to be issuable in permanent global form and, if so, whether owners of beneficial interests in any such permanent global Security may exchange such interests for Definitive Securities of that series of like tenor of any authorized form and denomination or transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Security and vice versa and if so, the circumstances under which any such exchange or transfer may occur, if other than in the manner provided in Section 2.07 and the identity of the Depositary;

(16) the Person to whom any interest on any Security of the series shall be payable, if other than the Person in whose name that Security (or one or more predecessor

Securities) is registered at the close of business on the Record Date for such interest and the extent to which, or the manner in which, any interest payable on a temporary global Security on an interest payment date will be paid;

(17) the applicability, if any, of Sections 8.02 and/or 8.03 to the Securities of the series and any provisions in modification of, in addition to or in lieu of any of the provisions of Article 8;

(18) if the Securities of that series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of that series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and/or terms of such certificates, documents or conditions;

(19) if the Securities of the series are to be issued upon the exercise of warrants, the time, manner and place for such Securities to be authenticated and delivered;

(20) whether and under what circumstances the Issuer will pay Additional Amounts as contemplated by Section 4.05 on the Securities of the series to any Holder who is not a United States person (including any modification to the definition of such term) in respect of any tax, assessment or governmental charge and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such Additional Amounts (and the terms of any such option);

(21) the obligation, if any, of Ventas, Inc. to permit the conversion of the Securities of that series into Ventas, Inc.’s Common Stock, and the terms and conditions upon which such conversion shall be effected (including, without limitation, the initial conversion price or rate, the conversion period, any adjustment of the applicable conversion price, any requirements relative to reservation of shares for purposes of conversion and any other provision in addition to or in lieu of those set forth in this Indenture or any indenture supplemental hereto relative to such obligation);

(22) if other than U.S. Dollars, the foreign currency in which payment of the principal of, premium (if any), interest and Additional Amounts (if any) on the Securities of that series shall be payable or in which such Securities shall be denominated and the particular provisions applicable thereto; and

(23) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution (subject to Section 2.03) and set forth in such Officers’ Certificate or in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of the Holders, for issuances of additional Securities of that series.

If any of the terms of the Securities of any series are established by action taken pursuant to one or more Board Resolutions, a copy of an appropriate record of such action(s) shall be certified by the Secretary or an Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the Securities of that series.

Section 2.03 Execution and Authentication.

Two Officers must sign the Securities of any series for the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Security no longer holds that office at the time a Security is authenticated, the Security will nevertheless be valid.

A Security will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Security has been authenticated under this Indenture.

The Trustee will, upon receipt at any time or from time to time of a written order of the Issuer signed by two Officers (an “ Authentication Order ”), authenticate Securities of any series for original issue up to the aggregate principal amount set forth in such Authentication Order. The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

In authenticating Securities of any series, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to TIA §§ 315(a) through 315(d)) shall be fully protected in relying upon,

(1) an Opinion of Counsel stating that:

(i) the form or forms of such Securities have been established in conformity with the provisions of this Indenture;

(ii) the terms of such Securities have been established in conformity with the provisions of this Indenture; and

(iii) such Securities, when completed by appropriate insertions and executed and delivered by the Issuer to the Trustee for authentication in accordance with this Indenture, authenticated and delivered by the Trustee in accordance with this Indenture and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute legal, valid and binding obligations of the Issuer, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization and other similar laws of general applicability relating to or affecting the

enforcement of creditors’ rights, to general equitable principles and to such other qualifications as such counsel shall conclude do not materially affect the rights of Holders of such Securities; and

(2) an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the issuance of the Securities have been complied with and that, to the best of the knowledge of the signers of such Certificate, no Event of Default with respect to any of the Securities shall have occurred and be continuing.

Section 2.04 Registrar and Paying Agent.

The Issuer will maintain in each Place of Payment for Securities of any series an office or agency where such Securities may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where such Securities may be presented for payment (“ Paying Agent ”). The Registrar will keep a register of the Securities of that series and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without notice to any Holder. The Issuer will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Securities.

The Issuer initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Securities.

Section 2.05 Paying Agent to Hold Money in Trust.

The Issuer will require each Paying Agent for Securities of a series other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Additional Amounts, if any, or interest on the Securities of that series, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) will have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee will serve as Paying Agent for the Securities.

Section 2.06 Holder Lists.

The Trustee in respect of Securities of a series will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders of Securities of that series and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar of such Securities, the Issuer will furnish to the Trustee at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of such Securities and the Issuer shall otherwise comply with TIA § 312(a).

Section 2.07 Transfer and Exchange.

(a) Transfer and Exchange of Global Securities . A Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Securities will be exchanged by the Issuer for Definitive Securities if:

(1) the Issuer delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 120 days after the date of such notice from the Depositary; or

(2) the Issuer in its sole discretion determine that the Global Securities (in whole but not in part) should be exchanged for Definitive Securities and deliver a written notice to such effect to the Trustee.

Upon the occurrence of either of the preceding events in subparagraph (1) or (2) above, Definitive Securities shall be issued in such names as the Depositary shall instruct the Trustee. Global Securities also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.11. Every Security authenticated and delivered in exchange for, or in lieu of, a Global Security or any portion thereof, pursuant to this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Security. A Global Security may not be exchanged for another Security other than as provided in this Section 2.07(a), however, beneficial interests in a Global Security may be transferred and exchanged as provided in Section 2.07(b) or (c).

(b) Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Transfers of beneficial interests in the Global Securities also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following paragraphs, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Security. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.07(b)(1).

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.07(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:

(i) both:

(A) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged; and

(B) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

(ii) both:

(A) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Security in an amount equal to the beneficial interest to be transferred or exchanged; and

(B) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Security shall be registered to effect the transfer or exchange referred to in (1) above. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Indenture and the Securities or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security(s) pursuant to Section 2.07(g).

(c) Transfer or Exchange of Beneficial Interests for Definitive Securities. If any holder of a beneficial interest in a Global Security is entitled to exchange such beneficial interest for a Definitive Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Security of the same series and of like tenor and principal amount of authorized form and denomination, as specified as contemplated by Section 2.02(15), then, upon satisfaction of the conditions set forth in Section 2.07(b)(2), the Trustee will cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant

to Section 2.07(g), and the Issuer will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Security in the appropriate principal amount. Any Definitive Security issued in exchange for a beneficial interest pursuant to this Section 2.07(c) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Securities to the Persons in whose names such Securities are so registered.

(d) Transfer and Exchange of Definitive Securities for Beneficial Interests. If at any time a Holder of a Definitive Security is entitled to exchange such Security for a beneficial interest in a Global Security or transfer such Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in a Global Security of the same series and of like tenor and principal amount of authorized form and denomination, as specified as contemplated by Section 2.02(15), then, upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Definitive Security and increase or cause to be increased the aggregate principal amount of one of the appropriate Global Securities. If any such exchange or transfer from a Definitive Security to a beneficial interest is effected pursuant to this paragraph (d) at a time when a Global Security has not yet been issued, the Issuer will issue and, upon receipt of an Authentication Order in accordance with Section 2.03 hereof, the Trustee will authenticate one or more Global Securities in an aggregate principal amount equal to the principal amount of the Definitive Security proposed to be so exchanged or transferred.

(e) Transfer and Exchange of Definitive Securities for Definitive Securities. Upon request by a Holder of Definitive Securities and such Holder’s compliance with the provisions of this Section 2.07(e), the Registrar will register the transfer of such Holder’s Definitive Securities to a Person who takes delivery thereof in the form of one or more Definitive Securities of the same series, of any authorized denominations and of like aggregate principal amount or the exchange of such Holder’s Definitive Securities for Definitive Securities of the same series, of any authorized denominations and of like aggregate principal amount. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Securities duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. A Holder of Definitive Securities may transfer such Securities. Upon receipt of a request to register such a transfer, the Registrar shall register the Definitive Securities pursuant to the instructions from the Holder thereof.

(f) Global Security Legend. The following legend will appear on the face of all Global Securities issued under this Indenture unless specifically stated otherwise in the applicable provisions of one or more indentures supplemental hereto or approved from time to time by or pursuant to Board Resolutions in accordance with Section 2.02 of this Indenture:

“THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO

ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT ( 1 ) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, ( 2 ) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, ( 3 ) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND ( 4 ) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“ DTC ”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(g) Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security will be returned to or retained and canceled by the Trustee in accordance with Section 2.12. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security will be reduced accordingly and an endorsement will be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security will be increased accordingly and an endorsement will be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(h) General Provisions Relating to Transfers and Exchanges.

(1) To permit registrations of transfers and exchanges, the Issuer will execute and the Trustee will authenticate Global Securities and Definitive Securities upon receipt of an Authentication Order in accordance with Section 2.03 or at the Registrar’s request.

(2) No service charge will be made to a Holder of a Global Security or to a Holder of a Definitive Security for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.07, and 9.05 hereof). The Registrar will not be required to register the transfer of or exchange any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

(3) All Global Securities and Definitive Securities issued upon any registration of transfer or exchange of Global Securities or Definitive Securities will be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Securities or Definitive Securities surrendered upon such registration of transfer or exchange.

(4) The Issuer will not be required:

(i) to issue, to register the transfer of or to exchange any Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.03 hereof and ending at the close of business on the day of selection;

(ii) to register the transfer of or to exchange any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part;

(iii) to register the transfer of or to exchange a Security between a Record Date and the next succeeding Interest Payment Date; or

(iv) to register the transfer of any Security which has been surrendered for repayment at option of Holder, except the portion, if any, of such Security not to be so repaid.

(5) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Securities and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(6) The Trustee will authenticate Global Securities and Definitive Securities in accordance with the provisions of Section 2.03 hereof.

(7) All orders and instructions required to be submitted to the Registrar or the Issuer pursuant to this Section 2.07 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.08 Replacement Securities.

If any mutilated Security is surrendered to the Trustee or the Issuer or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Security, the Issuer will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Security if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Issuer may charge for their expenses in replacing a Security.

Every replacement Security is an additional obligation of the Issuer and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder.

Notwithstanding the provisions of the previous two paragraphs, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Security, pay such Security.

Section 2.09 Outstanding Securities.

The Securities “Outstanding” at any time are all the Securities authenticated by the Trustee except for:

(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(2) Securities, or portions thereof, for whose payment or redemption or repayment at the option of the Holder money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer) in trust or set aside and segregated in trust by the Issuer (if the Issuer shall act as its own Paying Agent) for the Holders of such Securities, provided that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3) Securities, except to the extent provided in Sections 8.02 and 8.03, with respect to which the Issuer has effected defeasance and/or covenant defeasance as provided in Article 8;

(4) Securities which have been paid pursuant to Section 4.01 or 11.01 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Issuer; and

(5) Securities converted into Common Stock in accordance with or as contemplated by this Indenture, if the terms of such Securities provide for convertibility as contemplated by Section 2.02;

provided, however , that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver, and for the purpose of making the calculations required by TIA § 313, ( i ) the principal amount of an Original Issue Discount Security that may be counted in making such determination or calculation and that shall be deemed to be Outstanding for such purpose shall be equal to the amount of principal thereof that would be (or shall have been declared to be) due and payable, at the time of such determination, upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02, ( ii ) the principal amount of any Indexed Security that may be counted in making such determination or calculation and that shall be deemed Outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Security as contemplated by Section 2.02, and ( iii ) Securities owned by the Issuer or any other obligor upon the Securities or any Affiliate of the Issuer or of such other obligor shall be disregarded and deemed not to be Outstanding to the extent provided in Section 2.10.

Section 2.10 Treasury Securities.

In determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, waiver or consent, and for the purpose of making the calculations required by TIA § 313, Securities owned by the Issuer or any other obligor upon the Securities or any Affiliate of the Issuer or of such other obligor shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee shall be protected in making such calculation or in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any Affiliate of the Issuer or of such other obligor.

Section 2.11 Temporary Securities.

Until certificates representing Securities are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary

Securities. Temporary Securities will be substantially in the form of certificated Securities but may have variations that the Issuer considers appropriate for temporary Securities and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer will prepare and the Trustee will authenticate definitive Securities in exchange for temporary Securities.

Holders of temporary Securities will be entitled to all of the benefits of this Indenture.

Section 2.12 Cancellation.

The Issuer at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and will dispose of canceled Securities (subject to the record retention requirement of the Exchange Act). The Issuer may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation, except for replacement Securities for mutilated Securities pursuant to Section 2.08 hereof.

Section 2.13 Defaulted Interest.

If the Issuer defaults in a payment of interest on the Securities of any series, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders of Securities of that series on a subsequent special record date, in each case at the rate provided in the Securities of that series and in Section 4.01 hereof. The Issuer will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Security of that series and the date of the proposed payment. The Issuer will fix or cause to be fixed each such special record date and payment date, provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) will mail or cause to be mailed to Holders of Securities of that series a notice that states the special record date, the related payment date and the amount of such interest to be paid on such Securities.

ARTICLE 3

REDEMPTION AND PREPAYMENT

Section 3.01 Applicability of Article.

Securities of any series which are redeemable before their maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.02 for Securities of any series) in accordance with this Article.

Section 3.02 Notices to Trustee.

The election of the Issuer to redeem or purchase in an offer to purchase Securities of any series shall be evidenced by a Board Resolution. The Issuer shall, at least 45 days prior to the redemption date fixed by the Issuer (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such redemption date and of the principal amount of Securities of that series to be redeemed by delivering to the Trustee an Officers’ Certificate setting forth:

(1) the paragraph of the Securities and/or Section of this Indenture or any indenture supplemental hereto pursuant to which the redemption shall occur;

(2) the redemption date;

(3) the principal amount of Securities of that series to be redeemed, plus accrued interest and Additional Amounts, if any, to the redemption date; and

(4) the redemption price, including any make-whole amount or premium, if applicable.

Section 3.03 Selection of Securities to Be Redeemed.

If less than all of the Securities of any series are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select the particular Securities for redemption or purchase from the Outstanding Securities of that series not previously called for redemption, as follows:

(1) if the Securities of that series are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Securities are listed; or

(2) if the Securities of that series are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

In the event of partial redemption by lot, the particular Securities to be redeemed will be selected, unless otherwise provided in this Indenture, not less than 30 nor more than 60 days prior to the redemption date by the Trustee.

The Trustee will promptly notify the Issuer in writing of the Securities selected for redemption or purchase and, in the case of any Security selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Securities and portions of Securities of any series selected will be in amounts equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof; provided, however , that if all of the Outstanding Securities of a Holder are to be redeemed or purchased, the entire amount of such Securities held by such Holder, even if not a multiple of the minimum authorized denomination for Securities of that series, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Securities called for redemption or purchase also apply to portions of Securities called for redemption or purchase.

Section 3.04 Notice of Redemption.

At least 30 days but not more than 60 days before a redemption date, unless a shorter period is specified by the terms of that series as contemplated by Section 2.02, the Issuer will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Securities are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of this Indenture pursuant to Article 8 or 11 of this Indenture. Any notice that is mailed to the Holders of Securities in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.

The notice will identify the Securities to be redeemed and will state:

(1) the redemption date;

(2) the redemption price, including the accrued interest and Additional Amounts, if any, to the redemption date and any make-whole amount or premium, if applicable;

(3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date upon surrender of such Security, a new Security or Securities of the same series and tenor in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Security;

(4) the name and address of the Paying Agent;

(5) that Securities called for redemption must be surrendered to the Paying Agent at the Place of Payment to collect the redemption price or to convert (if applicable);

(6) that, unless the Issuer defaults in making such redemption payment, interest on Securities called for redemption ceases to accrue on and after the redemption date;

(7) the paragraph of the Securities and/or Section of this Indenture or any indenture supplemental hereto pursuant to which the Securities called for redemption are being redeemed;

(8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities;

(9) that the redemption is for a sinking fund, if applicable; and

(10) if applicable, that a Holder of Securities who desires to convert Securities in connection with a redemption must satisfy the requirements for conversion contained in such Securities, the then existing conversion price or rate, and the date and time when the option to convert shall expire.

At the Issuer’s request, the Trustee will give the notice of redemption in the Issuer’s name and at their expense; provided , however , that the Issuer has delivered to the Trustee, at least 45 days (or such shorter period of time as is satisfactory to the Trustee) prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.05 Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.04 hereof, Securities called for redemption become irrevocably due and payable on the redemption date at the redemption price therein specified. Except as otherwise provided pursuant to Section 2.02 with respect to the Securities of any series, a notice of redemption of Securities of that series may not be conditional.

Section 3.06 Deposit of Redemption or Purchase Price.

On the redemption or purchase date, the Issuer will deposit with the Trustee or with the Paying Agent money in the currency or currencies, currency unit or units or composite currency or currencies in which the Securities are payable sufficient to pay the redemption or purchase price of and accrued interest and Additional Amounts, if any, on all Securities to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Additional Amounts, if any, on, all Securities to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Securities or the portions of Securities called for redemption or purchase. If a Security is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose name such Security was registered at the close of business on such Record Date; provided , however , that except as otherwise provided with respect to Securities convertible into Common Stock, installments of interest on Securities whose maturity is on or prior to the redemption date shall be payable to the Holders of such Securities, or one or more predecessor Securities, registered as such at the close of business on the relevant Record Dates according to the terms and provisions of Section 2.02. If any Security called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Securities and in Section 4.01 hereof.

Section 3.07 Securities Redeemed or Purchased in Part.

Upon surrender of a Security of a series that is redeemed or purchased in part at a Place of Payment therefor (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), the Issuer will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuer a new Security of the same series of any authorized denomination as requested by the Holder in an aggregate principal amount equal to and in exchange for the unredeemed or unpurchased portion of the principal of the Security so surrendered.

Section 3.08 Conversion Arrangement on Call for Redemption.

In connection with any redemption of Securities, the Issuer may arrange for the purchase and conversion of any Securities called for redemption by an agreement with one or more investment bankers or other purchasers to purchase such Securities by paying to the Trustee or the Paying Agent in trust for the Holders of Securities, on or before 10:00 a.m. Eastern Time on the redemption date, an amount not less than the redemption price, together with interest, if any, accrued to the redemption date of such Securities, in immediately available funds. Notwithstanding anything to the contrary contained in this Article 3, the obligation of the Issuer to pay the redemption price of such Securities, including all accrued interest, if any, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, any Securities not duly surrendered for conversion by the Holders thereof may, at the option of the Issuer, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such Holders and surrendered by such purchasers for conversion, all as of immediately prior to the close of business on the last day on which Securities of that series called for redemption may be converted in accordance with this Indenture and the terms of such Securities, subject to payment to the Trustee or Paying Agent of the above-described amount. The Trustee or the Paying Agent shall hold and pay to the Holders whose Securities are selected for redemption any such amount paid to it in the same manner as it would pay moneys deposited with it by the Issuer for the redemption of Securities. Without the Trustee’s and the Paying Agent’s prior written consent, no arrangement between the Issuer and such purchasers for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee and the Paying Agent as set forth in this Indenture, and the Issuer agrees to indemnify the Trustee and the Paying Agent from, and hold them harmless against, any loss, liability or expense owing out of or in connection with any such arrangement for the purchase and conversion of any Securities between the Issuer and such purchasers, including the costs and expenses incurred by the Trustee and Paying Agent (including the fees and expenses of their agents and counsel) in the defense of any claim or liability arising out of or in connection with the exercise or performance of any of their powers, duties, responsibilities or obligations under this Indenture.

ARTICLE 4

COVENANTS

Section 4.01 Payment of Securities.

The Issuer will pay or cause to be paid the principal of, premium, if any, and interest and Additional Amounts, if any, on the Securities of each series on the dates, in the currency or currency unit and in the manner provided in the terms of that series of Securities and this Indenture. Principal, premium, if any, and interest and Additional Amounts, if any, will be considered paid on the date due if the Paying Agent, if other than Ventas, Inc. or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Securities of the applicable series to the extent lawful; the Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Amounts (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency.

The Issuer will maintain in each Place of Payment for Securities of any series an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Securities of that series may be presented or surrendered for payment or conversion, where Securities of that series may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Securities of that series and this Indenture may be served. The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Issuer may also from time to time designate one or more other offices or agencies where the Securities of any series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission will in any manner relieve the Issuer of its obligation to maintain an office or agency in the Place of Payment for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Unless otherwise specified with respect to Securities of any series as contemplated by Section 2.02, the Issuer hereby designates as a Place of Payment for each series of Securities the Corporate Trust Office of the Trustee in the Borough of Manhattan in the City of New York as one such office or agency of the Issuer in accordance with Section 2.04 hereof.

Section 4.03 Reports.

The Issuer and each Guarantor shall

(1) file with the Trustee, within 15 days after the Issuer or such Guarantor is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Issuer or such Guarantor may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer or such Guarantor is not required to file information, documents or reports pursuant to either of such Sections, then they/it will file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

(2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Issuer and such Guarantor with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations (it being understood that any Guarantor not required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall not be required to file such reports with the Commission or the Trustee); and

(3) transmit by mail to the Holders of Securities, within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in TIA § 313(c), such summaries of any information, documents and reports required to be filed by the Issuer or any Guarantor pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

If Ventas, Inc. has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the financial information required by this Section 4.03 will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of Ventas, Inc. and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Ventas, Inc.

Section 4.04 Compliance Certificate.

(a) Ventas, Inc. and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of Ventas, Inc. and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether Ventas, Inc. has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such

Officer signing such certificate, that to the best of his or her knowledge Ventas, Inc. has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action Ventas, Inc. is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities of any series is prohibited or if such event has occurred, a description of the event and what action Ventas, Inc. is taking or proposes to take with respect thereto. For purposes of this Section 4.04, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture.

(b) So long as any of the Securities are outstanding, Ventas, Inc. will deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

Section 4.05 Additional Amounts.

If any Securities of a series provide for the payment of Additional Amounts, the Issuer will pay to the Holder of any Security of that series Additional Amounts as may be specified as contemplated by Section 2.02. Whenever in this Indenture there is mentioned the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided by the terms of that series established pursuant to Section 2.02 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to such terms and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

Except as otherwise specified as contemplated by Section 2.02, if the Securities of a series provide for the payment of Additional Amounts, at least 10 days prior to the first interest payment date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers’ Certificate, the Issuer will furnish the Trustee and the Issuer’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers’ Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are not United States persons without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of the series. If any such withholding shall be required, then such Officers’ Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities of that series and the Issuer will

pay to the Trustee or such Paying Agent the Additional Amounts required by the terms of such Securities. In the event that the Trustee or any Paying Agent, as the case may be, shall not so receive the above-mentioned certificate, then the Trustee or such Paying Agent shall be entitled ( i ) to assume that no such withholding or deduction is required with respect to any payment of principal or interest with respect to any Securities of a series until it shall have received a certificate advising otherwise and ( ii ) to make all payments of principal and interest with respect to the Securities of a series without withholding or deductions until otherwise advised. The Issuer covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them or in reliance on any Officers’ Certificate furnished pursuant to this Section or in reliance on the Issuer’s not furnishing such an Officers’ Certificate.

Section 4.06 Corporate Existence.

Except as permitted by Article 5 and Section 10.04, Ventas, Inc. and its Restricted Subsidiaries shall do all things necessary to preserve and keep their existence, rights and franchises; provided , however , that the existence of a Restricted Subsidiary may be terminated if the Board of Directors of Ventas, Inc. determines that it is in the best interests of Ventas, Inc. to do so.

ARTICLE 5

SUCCESSORS

Section 5.01 Merger, Consolidation, or Sale of Assets.

Ventas, Inc. may not, directly or indirectly: ( 1 ) consolidate or merge with or into another Person (whether or not Ventas, Inc. is the surviving corporation); or ( 2 ) sell, assign, transfer, convey, lease (other than to an unaffiliated operator in the ordinary course of business) or otherwise dispose of all or substantially all of the properties or assets of Ventas, Inc. and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless:

(1) either:

(i) Ventas, Inc. is the surviving corporation; or

(ii) the Person formed by or surviving any such consolidation or merger (if other than Ventas, Inc.) or to which such sale, assignment, transfer, conveyance or other disposition has been made is organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(2) the Person formed by or surviving any such consolidation or merger (if other than Ventas, Inc.) or the Person to which such sale, assignment, transfer,

conveyance or other disposition has been made assumes all the obligations of Ventas, Inc. under the Securities and this Indenture pursuant to agreements reasonably satisfactory to the Trustee; and

(3) immediately after such transaction, on a pro forma basis giving effect to such transaction or series of transactions (and treating any obligation of Ventas, Inc. or any Restricted Subsidiary incurred in connection with or as a result of such transaction or series of transactions as having been incurred at the time of such transaction), no Default or Event of Default exists.

In addition, in the case of any lease of all or substantially all of its properties or assets (other than to an unaffiliated operator in the ordinary course of business), in one or more related transactions, to any other Person the terms of the lease must be reasonably acceptable to the Trustee or to Holders of a majority in principal amount of the Securities.

This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Ventas, Inc. and its Restricted Subsidiaries.

Section 5.02 Successor Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, conveyance, transfer or other disposition of all or substantially all of the properties or assets of Ventas, Inc. in accordance with Section 5.01, the successor Person formed by such consolidation or into which Ventas, Inc. is merged or to which such sale, assignment, transfer, conveyance or other disposition is made, shall succeed to, and be substituted for, and may exercise every right and power of, Ventas, Inc. under this Indenture with the same effect as if such successor initially had been named as Ventas, Inc. herein. Such successor thereupon may cause to be signed, and may issue either in its own name or in the name of Ventas, Inc., any or all of the Securities issuable hereunder which theretofore shall not have been signed by Ventas, Inc. and delivered to the Trustee; and, upon the order of such successor, instead of Ventas, Inc., and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the Officers of Ventas, Inc. to the Trustee for authentication, and any Securities which such successor thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof.

In case of any such consolidation, merger, sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

When a successor assumes all the obligations of its predecessor under this Indenture and the Securities following a consolidation or merger, or any sale, assignment, transfer, conveyance, transfer or other disposition of 90% or more of the assets of the

predecessor in accordance with the foregoing provisions, the predecessor shall be released from those obligations.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

Each of the following is an “Event of Default” wherever used herein with respect to any particular series of Securities:

(1) Ventas, Inc. or its Restricted Subsidiaries do not pay the principal or any premium on any Security of that series when due and payable;

(2) Ventas, Inc. or its Restricted Subsidiaries do not pay interest on any Security of that series within 30 days after the applicable due date;

(3) Ventas, Inc. or its Restricted Subsidiaries fail to deposit any sinking fund payment, when and as due by the terms of any Security of that series;

(4) Ventas, Inc. or its Restricted Subsidiaries remain in breach of any other term of this Indenture for 60 days after they receive a notice of Default stating they are in breach. Either the Trustee or the Holders of more than 25% in aggregate principal amount of the Securities of that series then Outstanding may send the notice;

(5) except as permitted by this Indenture and the Securities of that series, the Securities Guarantee by any Guarantor shall cease to be in full force and effect or any Guarantor shall deny or disaffirm its obligations with respect thereto;

(6) Ventas, Inc. or its Restricted Subsidiaries default under any of their indebtedness (including a default with respect to Securities of any series other than that series) in an aggregate principal amount exceeding $50.0 million after the expiration of any applicable grace period, which default results in the acceleration of the maturity of such indebtedness. Such default is not an Event of Default if the other indebtedness is discharged, or the acceleration is rescinded or annulled, within a period of 10 days after Ventas, Inc. or its Restricted Subsidiaries receive notice specifying the default and requiring that they discharge the other indebtedness or cause the acceleration to be rescinded or annulled. Either the Trustee or the Holders of more than 25% in aggregate principal amount of the Securities of that series then Outstanding may send the notice;

(7) Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary:

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an involuntary case;

(iii) consents to the appointment of a custodian of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, in an involuntary case;

(ii) appoints a custodian of Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, or for all or substantially all of the property of Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or

(iii) orders the liquidation of Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(9) any other Event of Default provided with respect to Securities of that series as contemplated by Section 2.02.

Section 6.02 Acceleration.

In the case of an Event of Default specified in clause (7) or (8) of Section 6.01, with respect to Ventas, Inc. or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all Outstanding Securities will become due and payable immediately without further action or notice. If any other Event of Default with respect to Securities of any series at the time Outstanding occurs and has not been cured, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities of that series then Outstanding may declare the entire principal amount (or, if any Securities are Original Issue Discount Securities or Indexed Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of that series to be due and immediately payable by written notice to the Issuer, Ventas, Inc. and the Trustee. Upon any such declaration, such principal amount (or specified amount) of the Securities of that series shall become due and payable immediately. The Holders of a majority in aggregate principal amount of the Securities

of that series then Outstanding by written notice to the Trustee may on behalf of all of the Holders rescind and annul an acceleration and its consequences if the rescission or annulment would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.

Section 6.03 Other Remedies.

If an Event of Default occurs and is continuing with respect to Securities of any series at the time Outstanding, the Trustee may pursue any available remedy to collect the payment of principal, premium and Additional Amounts, if any, and interest on the Securities of that series or to enforce the performance of any provision of the Securities of that series or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Securities of that series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Security of that series in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04 Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then Outstanding Securities of any series by notice to the Trustee may on behalf of the Holders of all of the Securities of that series waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Additional Amounts, if any, or interest on, the Securities of that series (excluding in connection with an offer to purchase) or in respect of a covenant or provision of this Indenture which under Article 9 may not be modified or amended without the consent of the Holder of each Outstanding Security of the affected series; provided , however , that the Holders of a majority in aggregate principal amount of the then Outstanding Securities of that series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration as provided in Section 6.02. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05 Control by Majority.

Holders of a majority in aggregate principal amount of the Securities of any series then Outstanding may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it with respect to the Securities of that series. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly

prejudicial to the rights of other Holders of Securities of that series or to the Holders of the Securities of any other series or that may involve the Trustee in personal liability.

Section 6.06 Limitation on Suits.

A Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of that series only if:

(1) such Holder has given the Trustee written notice that an Event of Default has occurred and remains uncured;

(2) the Holders of at least a majority in aggregate principal amount of all Outstanding Securities of that series have made a written request that the Trustee take action because of the Default, and offered reasonable indemnity to the Trustee against the cost and other liabilities of taking that action;

(3) the Trustee has not taken action for 60 days after receipt of the notice and offer of indemnity; and

(4) the Holders of at least a majority in aggregate principal amount of all Outstanding Securities of that series have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of any Security of any series may not use this Indenture to prejudice the rights of another Holder of a Security of that series or to obtain a preference or priority over another Holder of a Security of that series.

Section 6.07 Rights of Holders of Securities to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of any Security to receive payment of principal, premium and Additional Amounts, if any, and interest on such Security, on or after the respective due dates expressed in such Security (excluding in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08 Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(1), (2) or (3) occurs and is continuing with respect to the Securities of any series, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal (including any sinking fund payment), premium and Additional Amounts, if any, and interest remaining unpaid on the Securities of that series and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09 Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Securities of any series allowed in any judicial proceedings relative to the Issuer or any other obligor upon the Securities of that series, their creditors or their property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder of Securities of that series to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities of that series, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders of Securities of that series may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder of a Security in any such proceeding.

Section 6.10 Priorities.

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second: to Holders of Securities in respect of which or for the benefit of which such money has been collected for amounts due and unpaid on such Securities for principal, premium and Additional Amounts, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium and Additional Amounts, if any, and interest, respectively; and

Third: to the Issuer or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of Securities pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Security pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then Outstanding Securities of any series.

ARTICLE 7

TRUSTEE

Section 7.01 Duties of Trustee.

(a) If an Event of Default with respect to the Securities of any series has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph ( b ) of this Section 7.01;

(2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs ( a ), ( b ), and ( c ) of this Section 7.01.

(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holder, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

Section 7.02 Rights of Trustee.

(a) The Trustee may conclusively rely upon any document (whether original or facsimile) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care unless the Trustee was negligent in acting through its attorneys and agents.

(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer will be sufficient if signed by an Officer of the Issuer.

(f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

Section 7.03 Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04 Trustee’s Disclaimer.

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Issuer’s use of the proceeds from the Securities or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Securities or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication.

Section 7.05 Notice of Defaults.

If a Default or Event of Default occurs and is continuing with respect to the Securities of any series and if it is known to the Trustee, the Trustee will mail to Holders of Securities of that series a notice of the Default or Event of Default within 90 days after it occurs, unless such default shall have been cured or waived. Except in the case of a Default or Event of Default in payment of principal of, premium or Additional Amounts, if any, or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Securities of that series.

Section 7.06 Reports by Trustee to Holders of the Securities.

(a) Within 120 days after the end of each fiscal year beginning with the end of the fiscal year following the date of this Indenture, and for so long as Securities of any series remain Outstanding, the Trustee will mail to all Holders of the Securities of that series a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be

transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by mail all reports as required by TIA § 313(c).

(b) A copy of each report at the time of its mailing to the Holders of Securities will be mailed by the Trustee to the Issuer and filed by the Trustee with the Commission and each stock exchange on which such Securities are listed in accordance with TIA § 313(d). The Issuer will promptly notify the Trustee when the Securities of any series are listed on any stock exchange.

Section 7.07 Compensation and Indemnity.

(a) The Issuer will pay to the Trustee from time to time reasonable compensation as agreed upon between the Trustee and Issuer for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Issuer will reimburse the Trustee promptly upon written request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services (including the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel), except any such disbursement, advances and expenses as shall be determined to have been caused by the Trustee’s own negligence, bad faith or willful misconduct.

(b) The Issuer and each Guarantor will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuer and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuer, the Guarantors or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence, bad faith, or willful misconduct. The Trustee will notify the Issuer in writing promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer will not relieve the Issuer or any of the Guarantors of its obligations hereunder. The Issuer or such Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Issuer will pay the reasonable fees and expenses of such counsel. Neither the Issuer nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

(c) The obligations of the Issuer and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture.

(d) To secure the Issuer’s payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Securities of any series on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities of any series. Such Lien will survive the satisfaction and discharge of this Indenture.

(e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and the compensation for the

services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.

Section 7.08 Replacement of Trustee.

(a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

(b) The Trustee may resign with respect to the Securities of one or more series in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in aggregate principal amount of the then Outstanding Securities of any series may remove the Trustee with respect to the Securities of that series by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10 hereof;

(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(3) a custodian or public officer takes charge of the Trustee or its property; or

(4) the Trustee becomes incapable of acting.

(c) If the Trustee resigns, is removed, is incapable of acting or if a vacancy exists in the office of Trustee for any reason with respect to the Securities of one or more series, the Issuer, by Board Resolution, will promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series. Within one year after the successor Trustee or Trustees with respect to the Securities of any series takes office, the Holders of a majority in aggregate principal amount of the then Outstanding Securities of that series may appoint a successor Trustee with respect to the Securities of that series to replace the successor Trustee appointed by the Issuer.

(d) If a successor Trustee with respect to the Securities of any series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the Holders of at least 10% in aggregate principal amount of the then Outstanding Securities of that series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to Securities of that series.

(e) If the Trustee, after written request by any Holder of Securities of any series who has been a Holder of Securities of that series for at least six months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to Securities of that series.

(f) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture without any further act, deed or conveyance. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.

(g) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Issuer, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto, pursuant to Article 9 hereof, wherein each successor Trustee shall accept such appointment and which ( 1 ) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, ( 2 ) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and ( 3 ) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Issuer or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

(h) Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (f) and (g) of this Section, as the case may be.

(i) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

Section 7.09 Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of the parties hereto.

Section 7.10 Eligibility; Disqualification.

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition.

This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

Section 7.11 Preferential Collection of Claims Against Issuer.

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE


Section 8.01	Applicability of Article; Option to Effect Legal Defeasance or Covenant Defeasance.

If, pursuant to Section 2.02, provision is made for either or both of ( a ) defeasance of the Securities of or within a series under Section 8.02 or ( b ) covenant defeasance of the Securities of or within a series under Section 8.03, then the provisions of such Section or Sections, as the case may be, together with the other provisions of this Article (with such modifications thereto as may be specified pursuant to Section 2.02 with respect to any Securities), shall be applicable to such Securities, and the Issuer may at its option by Board Resolutions, at any time, with respect to such Securities, elect to have Section 8.02 (if applicable) or Section 8.03 (if applicable) be applied to such Outstanding Securities upon compliance with the conditions set forth below in this Article.

Section 8.02 Legal Defeasance and Discharge.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02 with respect to any Outstanding Securities of or within a series, the Issuer and

each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from their obligations with respect to all such Outstanding Securities (including the related Securities Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors will be deemed to have paid and discharged the entire Debt represented by such Outstanding Securities (including the related Securities Guarantees), which will thereafter be deemed to be “Outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Securities, such Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of such Outstanding Securities to receive payments in respect of the principal of, or interest or premium and Additional Amounts, if any, on such Securities when such payments are due from the trust referred to in Section 8.04 hereof;

(2) the Issuer’s obligations with respect to such Securities under Article 2 and Section 4.02 hereof;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s and the Guarantors’ obligations in connection therewith; and

(4) this Article 8.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03 Covenant Defeasance.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to any Outstanding Securities of or within a series, the Issuer and the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04, be released from each of their obligations under the covenant contained in Section 4.04 and, if specified as contemplated by Section 2.02, its obligations under any other covenant, with respect to such Outstanding Securities on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “ Covenant Defeasance ”), and such Securities will thereafter be deemed not “Outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, Covenant Defeasance means that, with respect to the Outstanding Securities and the related Securities Guarantees, the Issuer and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by

reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities and the related Securities Guarantees will be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to any Outstanding Securities of or within a series, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(4) through 6.01(6) hereof will not constitute Events of Default.

Section 8.04 Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof with respect to any Outstanding Securities of or within a series:

(1) the Issuer irrevocably deposits with the Trustee for the Securities of that series, in trust, for the benefit of the Holders, money in such currency or currencies, or currency unit or currency units, in which such Security is then specified as payable at maturity, non-callable Government Obligations applicable to such Securities (determined on the basis of the currency or currencies, or currency unit or currency units, in which such Securities are then specified as payable at maturity), or any combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of (including any sinking fund payment or analogous payments applicable to such Outstanding Securities), premium and Additional Amounts, if any, and interest on such Outstanding Securities on the stated date for payment thereof or on the applicable redemption date, as the case may be;

(2) in the case of an election under Section 8.02 hereof, the Issuer has delivered to the Trustee for the Securities of that series an Opinion of Counsel in the United States reasonably acceptable to such Trustee confirming that:

(i) the Issuer has received from, or there has been published by, the IRS a ruling; or

(ii) since the date of this Indenture, there has been a change in the applicable federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of an election under Section 8.03 hereof, the Issuer must deliver to such Trustee for Securities of that series an Opinion of Counsel in the United States reasonably acceptable to such Trustee confirming that the Holders of such Outstanding Securities will not recognize income, gain or loss for federal income tax

purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default shall have occurred in respect of Securities of that series and be continuing on the date of such deposit (other than a Default or Event of Default in respect of that series resulting from the borrowing of funds to be applied to such deposit);

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture in respect of Securities of that series) to which Ventas, Inc. or any of its Restricted Subsidiaries is a party or by which Ventas, Inc. or any of its Restricted Subsidiaries is bound;

(6) the Issuer must deliver to the Trustee for Securities of that series an Officers’ Certificate stating that the deposit was not made by Issuer with the intent of preferring the Holders of such Securities over the other creditors of Issuer with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;

(7) the Issuer must deliver to the Trustee for Securities of that series an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and

(8) notwithstanding any other provisions of this Section, such Legal Defeasance or Covenant Defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Issuer in connection therewith pursuant to Section 2.02.


Section 8.05	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money, Government Obligations or other property as may be provided pursuant to Section 2.02 (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 in respect of any Outstanding Securities of any series will be held in trust and applied by such Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as such Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, premium and Additional Amounts, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer will pay and indemnify such Trustee against any tax, fee or other charge imposed on or assessed against the money or non-callable Government Obligations

deposited pursuant to Section 8.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of such Outstanding Securities.

Notwithstanding anything in this Article 8 to the contrary, such Trustee will deliver or pay to the Issuer from time to time upon the request of the Issuer any money or non-callable Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to such Trustee (which may be the opinion delivered under Section 8.04(1)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06 Repayment to Issuer.

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium or Additional Amounts, if any, or interest on any Security and remaining unclaimed for two years after such principal, premium or Additional Amounts, if any, or interest has become due and payable shall be paid to the Issuer on their request or (if then held by the Issuer) will be discharged from such trust; and the Holder of such Security will thereafter be permitted to look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, will thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.

Section 8.07 Reinstatement.

(a) If the Trustee or Paying Agent is unable to apply any money or non-callable Government Obligations deposited in respect of Securities of or within a series in accordance with Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and the Guarantor’s obligations under this Indenture and such Securities and the related Securities Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided , however , that unless otherwise provided in the Board Resolution or indenture supplemental hereto pursuant to which such Securities shall have been issued, the principles set forth in paragraphs (b) and (c) of this Section 8.07 shall apply following such reinstatement; provided further , however , that if the Issuer makes any payment of principal of, premium or Additional Amounts, if any, or interest on any Security following the reinstatement of its obligations, the Issuer will be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent.

(b) If reinstatement of the Issuer’s and Guarantors’ obligations under this Indenture, the Securities and the related Securities Guarantees shall occur as provided in Section 8.07(a), such reinstatement shall be deemed to have occurred as of the date of such deposit except that no Default will be deemed to have occurred solely by reason of a breach while any such obligation was suspended.

(c) Neither ( 1 ) the continued existence following the reinstatement of the foregoing obligations of facts and circumstances or obligations that were incurred or otherwise came into existence while the foregoing obligations were suspended nor ( 2 ) the performance of any such obligations, including the consummation of any transaction pursuant to, and on materially the same terms as, a contractual agreement in existence prior to the reinstatement of the foregoing obligations, shall constitute a breach of any such obligations or cause a Default or Event of Default in respect thereof; provided, however , that ( A ) Ventas, Inc. and its Restricted Subsidiaries did not incur or otherwise cause such facts and circumstances or obligations to exist in anticipation of the reinstatement of the foregoing obligations and ( B ) Ventas, Inc. and its Restricted Subsidiaries did not reasonably believe that such incurrence or actions would result in such reinstatement. For purposes of clause (2) above, any increase in the consideration to be paid prior to such amendment or modification to the terms of an existing obligation following the reinstatement of the foregoing obligations that does not exceed 10% of the consideration that was to be paid prior to such amendment or modification shall not be deemed a “material” amendment or modification. For purposes of clauses (A) and (B) above, anticipation and reasonable belief may be determined by Ventas, Inc. and shall be conclusively evidenced by a board resolution to such effect adopted by the Board of Directors of Ventas, Inc.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Securities.

Notwithstanding Section 9.02 of this Indenture, the Issuer, the Guarantors and the Trustee may amend or supplement this Indenture, the Securities Guarantees or the Securities without the consent of any Holder of a Security:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Securities in addition to or in place of certificated Securities;

(3) to provide for the assumption of the Issuer’s obligations to Holders of Securities in the case of a merger or consolidation or sale of all or substantially all of the Issuer’s assets;

(4) to add to the covenants of the Issuer for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of that series) or to surrender any right or power herein conferred upon the Issuer;

(5) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such Events of Default are to be for the benefit of less than all series of Securities, stating that such Events of Default are expressly being included solely for the benefit of that series); provided , however , that in respect of any such additional Events of Default such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default or may limit the right of the Holders of a majority in aggregate principal amount of that or those series of Securities to which such additional Events of Default apply to waive such default;

(6) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision;

(7) to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 2.02, including the provisions and procedures relating to Securities convertible into Ventas, Inc. Common Stock;

(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

(9) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Sections 8.02, 8.03 and 11.01, provided that any such action shall not adversely affect the interests of the Holders of Securities of that series or any other series of Securities in any material respect;

(10) to add additional Securities Guarantees with respect to the Securities;

(11) to secure the Securities;

(12) to make any other change that would provide any additional rights or benefits to the Holders of Securities or that does not adversely affect the legal rights under this Indenture of any such Holder; or

(13) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA.

Section 9.02 With Consent of Holders of Securities.

Except as provided below in this Section 9.02, the Issuer, the Guarantors and the Trustee may amend or supplement this Indenture, the Securities Guarantees and the Securities with the consent of the Holders of at least a majority in aggregate principal amount of the then Outstanding Securities affected by such amendment or supplemental indenture voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Securities), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or Additional Amounts, if any, or interest on the Securities, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Securities Guarantees or the Securities may be waived generally or in a particular instance with the consent of the Holders of a majority in aggregate principal amount of the then Outstanding Securities affected thereby voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Securities).

However, without the consent of the Holder of each Outstanding Security affected thereby, an amendment or waiver under this Section 9.02 may not (with respect to any Securities held by a non-consenting Holder):

(1) reduce the principal amount of Securities of any series whose Holders must consent to an amendment, supplement or waiver;

(2) change the stated maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02, or adversely affect any right of repayment at the option of the Holder of any Security, or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date), in each case other than the amendment or waiver in accordance with the terms of this Indenture of any covenant or related definition included pursuant to Section 2.02 that provides for an offer to repurchase any Securities of a series upon a sale of assets or change of control transaction;

(3) waive a Default or Event of Default in the payment of principal of, or interest or premium, or Additional Amounts, if any, on the Securities of any series (except a rescission of acceleration of the Securities by the Holders of at least a majority in

aggregate principal amount of the Securities of that series then Outstanding and a waiver of the payment Default that resulted from such acceleration);

(4) make any Security payable in a currency or currencies or currency unit or currency units other than that stated in the Securities;

(5) make any change in Section 6.04 or 6.07 hereof relating to waivers of past Defaults or the rights of Holders of Securities to receive payments of principal of, or interest or premium or Additional Amounts, if any, on the Securities;

(6) release any Guarantor from any of its obligations under its Securities Guarantee or this Indenture, except in accordance with the terms of this Indenture;

(7) impair the rights of Holders to convert their Securities, if convertible, upon the terms established pursuant to or in accordance with the provisions of this Indenture; or

(8) make any change in the amendment and waiver provisions set forth in clauses (1) through (8) of this Section 9.02.

Section 2.09 hereof shall determine which Securities are considered to be “Outstanding” for purposes of this Section 9.02.

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of Holders of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of that series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

It is not necessary for the consent of the Holders of Securities under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it is sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer will mail to the Holders of Securities affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Section 9.03 Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Securities will be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04 Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder of a Security and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder of a Security or subsequent Holder of a Security may revoke the consent as to its Security if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

Section 9.05 Notation on or Exchange of Securities.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Outstanding Security thereafter authenticated. The Issuer in exchange for all Outstanding Securities of a series may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Securities of that series that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Security of that series will not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, etc.

Upon the request of the Issuer accompanied by Board Resolutions authorizing the execution of any amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Securities as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Issuer in the execution of an amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental indenture. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 13.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE 10

SECURITIES GUARANTEES

Section 10.01 Applicability of Article; Securities Guarantee.

(a) If the Issuer elects to issue any series of Securities with the benefit of Securities Guarantees as contemplated by Section 2.02, then the provisions of this Article 10 (with such modifications thereto as may be specified pursuant to Section 2.02 with respect to any series of Securities), will be applicable to such Securities. Each reference in this Article 10 to a

“Security” or “the Securities” refers to the Securities of the particular series as to which provision has been made for such Securities Guarantees. If more than one series of Securities as to which such provision has been made are Outstanding at any time, the provisions of this Article 10 shall be applied separately to each that series.

(b) Subject to this Article 10, each of the Guarantors, jointly and severally, fully and unconditionally guarantees to each Holder of a Security of any series issued with the benefit of Securities Guarantees authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, such Security or the obligations of the Issuer hereunder or thereunder, that:

(1) the principal of, premium and Additional Amounts, if any, and interest on such Security will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on such Security, if any, if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(2) in case of any extension of time of payment or renewal of any Securities of that series or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

(c) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Securities of any series issued with the benefit of Securities Guarantees or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities of that series with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor, other than payment in full of all obligations under the Securities of that series. Each Guarantor in respect of a series of Securities hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer in respect of that series, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenant that this Securities Guarantee will not be discharged except by complete performance of the obligations contained in such Securities and this Indenture.

(d) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid by either to the Trustee or such

Holder, this Securities Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

(e) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, ( 1 ) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of its Securities Guarantee notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and ( 2 ) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by such Guarantor for the purpose of its Securities Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Securities Guarantee.

Section 10.02 Limitation on Guarantor Liability.

Each Guarantor, and by its acceptance of Securities of any series issued with the benefit of Securities Guarantees, each Holder, hereby confirms that it is the intention of all such parties that the Securities Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Securities Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each such Guarantor will, after giving effect to any maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Securities Guarantee not constituting a fraudulent transfer or conveyance.

Section 10.03 Execution and Delivery of Securities Guarantee.

To evidence its Securities Guarantee set forth in Section 10.01 in respect of Securities of a series issued with the benefit of Securities Guarantees, each Guarantor hereby agrees that a notation of such Securities Guarantee substantially in the form as shall be established in one or more indentures supplemental hereto or approved from time to time pursuant to Board Resolutions in accordance with Section 2.02, will be endorsed by an Officer of such Guarantor on each Security of that series authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.

Each Guarantor hereby agrees that its Securities Guarantee set forth in Section 10.01 will remain in full force and effect notwithstanding any failure to endorse on each Security of that series a notation of such Securities Guarantee.

If an Officer whose signature is on this Indenture or on the Securities Guarantee no longer holds that office at the time the Trustee authenticates the Security of that series on which a Securities Guarantee is endorsed, such Securities Guarantee will be valid nevertheless.

The delivery of any Security of a series issued with the benefit of Securities Guarantees by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Securities Guarantee set forth in this Indenture on behalf of the Guarantors.

Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.

Subject to Article 5 and except as otherwise may be provided in a supplemental indenture pursuant to Section 2.02 in respect of the release of Guarantors in connection with a sale of assets permitted by such supplemental indenture or otherwise, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Issuer or another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and

(2) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under this Indenture and its Securities Guarantee pursuant to a supplemental indenture.

In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, of the Securities Guarantee endorsed upon the Securities of any series and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Securities Guarantees to be endorsed upon all of the Securities of that series issuable hereunder which theretofore shall not have been signed by the Issuer and delivered to the Trustee. All the Securities Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Securities Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Securities Guarantees had been issued at the date of the execution hereof.

Except as set forth in Article 5 or as otherwise may be provided in a supplemental indenture pursuant to Section 2.02, and notwithstanding this Section 10.04, nothing contained in this Indenture or in any of the Securities of any series will prevent any consolidation or merger of a Guarantor with or into the Issuer or another Guarantor of that series, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuer or another Guarantor of that series.

ARTICLE 11

SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge.

This Indenture will be discharged and will cease to be of further effect as to any series of Securities issued hereunder (except as to any surviving rights of registration of transfer or exchange of Securities of that series herein expressly provided for and the right to receive Additional Amounts), when:

(1) either:

(A) all Securities of that series that have been authenticated (except lost, stolen or destroyed Securities that have been replaced or paid and Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuer) have been delivered to the Trustee for cancellation; or

(B) all Securities of that series that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee for Securities of that series as trust funds in trust solely for the benefit of the Holders, money in such currency or currencies, or currency unit or currency units, in which such Securities are then specified as payable at maturity, non-callable Government Obligations applicable to such Securities (determined on the basis of the currency or currencies, or currency unit or currency units, in which such Securities are then specified as payable at maturity), or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on such Securities not delivered to the Trustee for cancellation for principal, premium and Additional Amounts, if any, and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default with respect to the Securities of that series has occurred and is continuing on the date of such deposit or will occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

(3) the Issuer or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture with respect to the Securities of that series; and

(4) the Issuer has delivered irrevocable instructions to the Trustee for Securities of that series, to apply the money on deposit in the trust referred to in

subclause (B) of clause (1) above toward the payment of such Securities at maturity or on the redemption date, as the case may be.

In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee for Securities of that series stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture in respect of Securities of a series, if money has been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the provisions of Section 11.02 and Section 8.06 will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 that, by their terms, survive the satisfaction and discharge of this Indenture.

Section 11.02 Application of Trust Money.

Subject to the provisions of Section 8.06, all money deposited with the Trustee in respect of any Securities pursuant to Section 11.01 shall be held in trust and applied by it, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest and Additional Amounts for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law and Section 2.05.

If the Trustee or Paying Agent is unable to apply any money or Government Obligations in accordance with Section 11.01 in respect of any Securities by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and any Guarantor’s obligations under this Indenture and such Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 and the provisions of Section 8.07 shall apply to the extent provided therein.

ARTICLE 12

CONVERSION OF SECURITIES

Section 12.01 Applicability of Article.

Securities of any series issued by Ventas, Inc. which are convertible into Common Stock at the option of the Holder of such Securities shall be convertible in accordance with their terms and (unless otherwise specified as contemplated by Section 2.02 for the Securities of any series) in accordance with this Article. Each reference in this Article 12 to “a Security” or “the Securities” refers to the Securities of the particular series that is convertible into Common Stock. If more than one series of Securities with conversion privileges is Outstanding at any time, the provisions of this Article 12 shall be applied separately to each that series.

Section 12.02 Right of Holders to Convert Securities into Common Stock.

Subject to and upon compliance with the terms of the Securities and the provisions of this Article 12, at the option of the Holder thereof, any Security of any series of any authorized denomination which is convertible into Common Stock, or any portion of the principal amount thereof which is $1,000 or any integral multiple of $1,000, may, at any time during the period specified in the Securities of that series, or in case such Security or portion thereof shall have been called for redemption, then in respect of such Security or portion thereof until and including, but not after (unless Ventas, Inc. shall default in payment due upon the redemption thereof) the close of business on the Business Day prior to the redemption date (except that in the case of repayment at the option of the Holder, if specified in the terms of the relevant Security, such right shall terminate upon Ventas, Inc.’s receipt of written notice of the exercise of such option), be converted into duly authorized, validly issued, fully paid and nonassessable shares of Common Stock, as specified in such Security, at the conversion price or conversion rate for each $1,000 principal amount of Securities (such initial conversion rate reflecting an initial conversion price specified in such Security) in effect on the conversion date, or, in case an adjustment in the conversion price has taken place pursuant to the provisions of this Article 12, then at the applicable conversion price as so adjusted, upon surrender of the Security or Securities, the principal amount of which is so to be converted, to Ventas, Inc. at any time during usual business hours at the office or agency to be maintained by it in accordance with the provisions of Section 4.02, accompanied by a written notice of election to convert as provided in Section 12.03 and, if so required by Ventas, Inc. and/or the Trustee, by a written instrument or instruments of transfer in form satisfactory to Ventas, Inc. and/or the Trustee, as applicable, duly executed by the Holder thereof or his attorney duly authorized in writing. All Securities surrendered for conversion shall, if surrendered to Ventas, Inc. or any conversion agent, be delivered to the Trustee for cancellation and cancelled by it, or shall, if surrendered to the Trustee, be cancelled by it, as provided in Section 2.12.

The initial conversion price or conversion rate in respect of a series of Securities shall be as specified in the Securities of that series. The conversion price or conversion rate will be subject to adjustment on the terms set forth in Section 12.05 or such other or different terms, if any, as may be specified as contemplated by Section 2.02 for Securities of that series. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of any portion of it.

Section 12.03 Issuance of Shares of Common Stock on Conversions.

As promptly as practicable after the surrender, as herein provided, of any Security or Securities for conversion into Common Stock, Ventas, Inc. shall deliver or cause to be delivered at its said office or agency to or upon the written order of the Holder of the Security or Securities so surrendered a certificate or certificates representing the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock into which such Security or Securities may be converted in accordance with the terms thereof and the provisions of this Article 12. Prior to delivery of such certificate or certificates, Ventas, Inc. shall require written notice at its said office or agency from the Holder of the Security or Securities so surrendered

stating that the Holder irrevocably elects to convert such Security or Securities, or, if less than the entire principal amount thereof is to be converted, stating the portion thereof to be converted. Such notice shall also state the name or names (with address and social security or other taxpayer identification number) in which said certificate or certificates are to be issued. Such conversion shall be deemed to have been made at the time that such Security or Securities shall have been surrendered for conversion and such notice shall have been received by Ventas, Inc. or the Trustee, the rights of the Holder of such Security or Securities as a Holder shall cease at such time, the Person or Persons entitled to receive the shares of Common Stock upon conversion of such Security or Securities shall be treated for all purposes as having become either record holder or holders of such shares of Common Stock at such time and such conversion shall be at the conversion price in effect at such time. In the case of any Security of any series which is converted in part only, upon such conversion, Ventas, Inc. shall execute and, upon Ventas, Inc.’s request and at Ventas, Inc.’s expense, the Trustee or an authenticating agent shall authenticate and deliver to the Holder thereof, as requested by such Holder, a new Security or Securities of that series of authorized denominations in aggregate principal amount equal to the unconverted portion of such Security.

If the last day on which such Security may be converted is not a Business Day in a place where the conversion agent for that Security is located, such Security may be surrendered to that conversion agent on the next succeeding day that is a Business Day.

Ventas, Inc. shall not be required to deliver certificates for shares of Common Stock upon conversion while its stock transfer books are closed for a meeting of shareholders or for the payment of dividends or for any other purpose, but certificates for shares of Common Stock shall be delivered as soon as the stock transfer books shall again be opened.

Section 12.04 No Payment or Adjustment for Interest or Dividends.

Unless otherwise specified as contemplated by Section 2.02 for Securities of that series, Securities surrendered for conversion into Common Stock during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date (except Securities called for redemption on a redemption date within such period) when surrendered for conversion must be accompanied by payment (by certified or official bank check to the order of Ventas, Inc. payable by check or in clearing house funds at the location where the Securities are surrendered) of an amount equal to the interest thereon which the Holder is entitled to receive on such Interest Payment Date. Payment of interest shall be made, on such Interest Payment Date or such other payment date (as set forth in Section 2.13), as the case may be, to the Holder of the Securities as of such Record Date. Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities will be payable by Ventas, Inc. on any Interest Payment Date subsequent to the date of conversion. No other payment or adjustment for interest or dividends is to be made upon conversion. Notwithstanding the foregoing, upon conversion of any Original Issue Discount Security, the fixed number of shares of Common Stock into which such Security is convertible delivered by Ventas, Inc. to the Holder thereof shall be applied, first, to the portion attributable to the accrued original issue discount relating to the

period from the date of issuance to the date of conversion of such Security, and, second, to the portion attributable to the balance of the principal amount of such Security.

Section 12.05 Adjustment of Conversion Price.

Unless otherwise specified as contemplated by Section 2.02 for Securities of that series, the conversion price for Securities convertible into Common Stock shall be adjusted from time to time as follows:

(a) In case Ventas, Inc. shall ( 1 ) pay a dividend or make a distribution on Common Stock in shares of Common Stock, ( 2 ) subdivide the outstanding Common Stock into a greater number of shares or ( 3 ) combine the outstanding Common Stock into a smaller number of shares, the conversion price for the Securities of that series shall be adjusted so that the Holder of any such Security thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock which he would have owned or have been entitled to receive after the happening of any of the events described above had such Security been converted immediately prior to the record date in the case of a dividend or distribution or the effective date in the case of subdivision or combination. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the record date in the case of a dividend or distribution, except as provided in paragraph (h) below, and shall become effective immediately after the effective date in the case of a subdivision or combination.

(b) In case Ventas, Inc. shall issue rights or warrants to all holders of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase shares of Common Stock at a price per share less than the current market price per share of Common Stock (as defined for purposes of this paragraph (b) in paragraph (e) below), at the record date for the determination of stockholders entitled to receive such rights or warrants, the conversion price in effect immediately prior thereto shall be adjusted so that the same shall equal the price determined by multiplying the conversion price in effect immediately prior to the date of issuance of such rights or warrants by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at such current market price, and the denominator of which shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock receivable upon exercise of such rights or warrants. Such adjustment shall be made successively whenever any such rights or warrants are issued, and shall become effective immediately, except as provided in paragraph (h) below, after such record date. In determining whether any rights or warrants entitle the Holders of the Securities of that series to subscribe for or purchase shares of Common Stock at less than such current market price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by Ventas, Inc. for such rights or warrants plus the exercise price thereof, the value of such consideration or exercise price, as the case may be, if other than cash, to be determined by the Board of Directors.

(c) In case Ventas, Inc. shall distribute to all holders of Common Stock any shares of Capital Stock of Ventas, Inc. (other than Common Stock) or evidences of its indebtedness or assets (excluding cash dividends or distributions paid from retained earnings of Ventas, Inc.) or rights or warrants to subscribe for or purchase any of its securities (excluding those rights or warrants referred to in paragraph (b) above) (any of the foregoing being herein in this paragraph (c) called the “ Special Securities ”), then, in each such case, unless Ventas, Inc. elects to reserve such Special Securities for distribution to the Holders of Securities of that series upon the conversion so that any such Holder converting such Securities will receive upon such conversion, in addition to the shares of Common Stock to which such Holder is entitled, the amount and kind of Special Securities which such Holder would have received if such Holder had, immediately prior to the record date for the distribution of the Special Securities, converted Securities into Common Stock, the conversion price shall be adjusted so that the same shall equal the price determined by multiplying the conversion price in effect immediately prior to the date of such distribution by a fraction the numerator of which shall be the current market price per share (as defined for purposes of this paragraph (c) in paragraph (e) below) of Common Stock on the record date mentioned above less the then fair market value (as determined by the Board of Directors, whose determination shall, if made in good faith, be conclusive) of the portion of the Special Securities so distributed applicable to one share of Common Stock, and the denominator of which shall be the current market price per share (as defined in paragraph (e) below) of Common Stock; provided, however , that in the event the then fair market value (as so determined) of the portion of the Special Securities so distributed applicable to one share of Common Stock is equal to or greater than the current market price per share (as defined in paragraph (e) below) of Common Stock on the record date mentioned above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder of Securities of that series shall have the right to receive the amount and kind of Special Securities such Holder would have received had such Holder converted such Securities immediately prior to the record date for the distribution of the Special Securities. Such adjustment shall become effective immediately, except as provided in paragraph (h) below, after the record date for the determination of stockholders entitled to receive such distribution.

(d) If, pursuant to paragraph (b) or (c) above, the number of shares of Common Stock shall have been adjusted because Ventas, Inc. has declared a dividend, or made a distribution, on the outstanding shares of Common Stock in the form of any right or warrant to purchase securities of Ventas, Inc., or Ventas, Inc. has issued any such right or warrant, then, upon the expiration of any such unexercised right or unexercised warrant, the conversion price shall forthwith be adjusted to equal the conversion price that would have applied had such right or warrant never been declared, distributed or issued.

(e) For the purpose of any computation under paragraph (b) above, the current market price per share of Common Stock on any date shall be deemed to be the average of the reported last sales prices for the 30 consecutive Trading Days (as defined below) commencing 45 Trading Days before the date in question. For the purpose of any computation under paragraph (c) above, the current market price per share of Common Stock on any date shall be deemed to be the average of the reported last sales prices for the 10 consecutive Trading Days before the date in question. The reported last sales price for each day (whether for purposes of paragraph

(b) or paragraph (c)) shall be the reported last sales price, regular way, or, in case no sale takes place on such day, the average of the reported closing bid and asked prices, regular way, in either case as reported on the New York Stock Exchange Composite Tape or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System (“ NASDAQ ”) or, if the Common Stock is not quoted on such National Market System, the average of the closing bid and asked prices on such day in the over-the-counter market as reported by NASDAQ or, if bid and asked prices for the Common Stock on each such day shall not have been reported through NASDAQ, the average of the bid and asked prices for such day as furnished by any New York Stock Exchange member firm regularly making a market in the Common Stock selected for such purpose by the Board of Directors of Ventas, Inc. or a committee thereof or, if no such quotations are available, the fair market value of the Common Stock as determined by a New York Stock Exchange Member firm regularly making a market in the Common Stock selected for such purpose by the Board of Directors of Ventas, Inc. or a committee thereof or, if no such quotations are available, the fair market value of the Common Stock as determined by a New York Stock Exchange member firm regularly making a market in the Common Stock selected for such purpose by the Board of Directors of Ventas, Inc. or a committee thereof. As used herein, the term “ Trading Day ” with respect to the Common Stock means ( 1 ) if the Common Stock is listed or admitted for trading on the New York Stock Exchange or another national securities exchange, a day on which the New York Stock Exchange or such other national securities exchange is open for business or ( 2 ) if the Common Stock is quoted on the National Market System of the NASDAQ, a day on which trades may be made on such National Market System or ( 3 ) otherwise, any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

(f) No adjustment in the conversion price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however , that any adjustments which by reason of this paragraph (f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and, provided, further , that adjustment shall be required and made in accordance with the provisions of this Article 12 (other than this paragraph (f)) not later than such time as may be required in order to preserve the tax free nature of a distribution to the holders of Common Stock. All calculations under this Article 12 shall be made to the nearest cent or to the nearest 1/100 of a share, as the case may be, with one-half cent and 1/200 of a share, respectively, being rounded upward. Anything in this Section 12.05 to the contrary notwithstanding, Ventas, Inc. shall be entitled to make such reductions in the conversion price, in addition to those required by this Section 12.05, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision of shares, distribution of rights or warrants to purchase stock or securities, or distribution of other assets (other than cash dividends) hereafter made by Ventas, Inc. to its stockholders shall not be taxable.

(g) Whenever the conversion price is adjusted, as herein provided, Ventas, Inc. shall promptly file with the Trustee, at the corporate trust office of the Trustee, and with the

office or agency maintained by Ventas, Inc. for the conversion of Securities of that series pursuant to Section 4.02, an Officers’ Certificate, setting forth the conversion price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment. Neither the Trustee nor any conversion agent shall be under any duty or responsibility with respect to any such certificate or any facts or computations set forth therein, except to exhibit said certificate from time to time to any Holder of a Security of that series desiring to inspect the same. Ventas, Inc. shall promptly cause a notice setting forth the adjusted conversion price to be mailed to the Holders of Securities of that series, as their names and addresses appear upon the Security Register of Ventas, Inc.

(h) In any case in which this Section 12.05 provides that an adjustment shall become effective immediately after a record date for an event, Ventas, Inc. may defer until the occurrence of such event ( 1 ) issuing to the Holder of any Security of that series converted after such record date and before the occurrence of such event the additional shares of the Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and ( 2 ) paying to such Holder any amount in cash in lieu of any fractional share of Common Stock pursuant to Section 12.06 hereof.

Section 12.06 No Fractional Shares to be Issued.

No fractional shares of Common Stock shall be issued upon any conversion of Securities. If more than one Security of any series shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Securities of that series (or specified portions thereof to the extent permitted hereby) so surrendered. Instead of a fraction of a share of Common Stock which would otherwise be issuable upon conversion of any Security or Securities (or specified portions thereof), Ventas, Inc. shall pay a cash adjustment (computed to the nearest cent, with one‑half cent being rounded upward) in respect of such fraction of a share in an amount equal to the same fractional interest of the reported last sales price (as defined in Section 12.05(e)) of the Common Stock on the Trading Day (as defined in Section 12.05(e)) next preceding the day of conversion.


Section 12.07	Preservation of Conversion Rights Upon Consolidation, Merger, Sale or Conveyance.

In case of any consolidation of Ventas, Inc. with, or merger of Ventas, Inc. into, any other corporation (other than a consolidation or merger in which the Ventas, Inc. is the continuing corporation), or in the case of any sale or transfer of all or substantially all of the assets of Ventas, Inc., the corporation formed by such consolidation or the corporation into which Ventas, Inc. shall have been merged or the corporation which shall have acquired such assets, as the case may be, shall execute and deliver to the Trustee, a supplemental indenture, in accordance with the provisions of Articles 5 and 9 as they relate to supplemental indentures, providing that the Holder of each Security then Outstanding of a series which was convertible

into Common Stock shall have the right thereafter to convert such Security into the kind and amount of shares of stock and other securities and property, including cash, receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock of Ventas, Inc. into which such Securities might have been converted immediately prior to such consolidation, merger, sale or transfer. Such supplemental indenture shall conform to the provisions of the TIA as then in effect and shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 12. Neither the Trustee nor any conversion agent shall have any liability or responsibility for determining the correctness of any provision contained in any such supplemental indenture relating either to the kind or amount of shares of stock or other securities or property receivable by Holders of the Securities upon the conversion of their Securities after any such consolidation, merger, sale or transfer, or to any adjustment to be made with respect thereto and, subject to the provisions of § 3.13 of the TIA, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Officers’ Certificate with respect thereto and an Opinion of Counsel with respect to legal matters related thereto. If in the case of any such consolidation, merger, sale or transfer, the stock or other securities and property receivable by a Holder of the Securities includes stock or other securities and property of a corporation other than the successor or purchasing corporation, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary. The above provisions of this Section 12.07 shall similarly apply to successive consolidations, mergers, sales or transfers.


Section 12.08	Notice to Holders of the Securities of a Series Prior to Taking Certain Types of Action.

With respect to the Securities of any series, in case:

(a) Ventas, Inc. shall authorize the issuance to all holders of Common Stock of rights or warrants to subscribe for or purchase shares of its Capital Stock or of any other right;

(b) Ventas, Inc. shall authorize the distribution to all holders of Common Stock of evidences of indebtedness or assets (except for cash dividends or distributions paid from retained earnings of Ventas, Inc.);

(c) of any subdivision or combination of Common Stock or of any consolidation or merger to which Ventas, Inc. is a party and for which approval by the shareholders of Ventas, Inc. is required, or of the sale or transfer of all or substantially all of the assets of Ventas, Inc.; or

(d) of the voluntary or involuntary dissolution, liquidation or winding up of Ventas, Inc.;

then Ventas, Inc. shall cause to be filed with the Trustee and at the office or agency maintained for the purpose of conversion of Securities of that series pursuant to Section 4.02, and shall cause

to be mailed to the Holders of Securities of that series, at their last addresses as they shall appear on the register of Ventas, Inc. maintained by the Registrar, at least 10 days prior to the applicable record date hereinafter specified, a notice stating ( 1 ) the date as of which the holders of Common Stock to be entitled to receive any such rights, warrants or distribution are to be determined, or ( 2 ) the date on which any such subdivision, combination, consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action is expected to become effective, and the date as of which it is expected that holders of record of Common Stock shall be entitled to exchange their Common Stock for securities or other property, if any, deliverable upon such subdivision, combination, consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action. The failure to give the notice required by this Section 12.08 or any defect therein shall not affect the legality or validity of any distribution, right, warrant, subdivision, combination, consolidation, merger, sale, transfer, dissolution, liquidation, winding up or other action, or the vote upon any of the foregoing. Such notice shall also be published by and at the expense of Ventas, Inc. not later than the aforesaid filing date at least once in an Authorized Newspaper.

Section 12.09 Covenants to Reserve Shares for Issuance on Conversion of Securities.

Ventas, Inc. covenants that at all times it will reserve and keep available out of each class of its authorized Common Stock, free from preemptive rights, solely for the purpose of issue upon conversion of Securities of any series as herein provided, such number of shares of Common Stock as shall then be issuable upon the conversion of all outstanding Securities of that series. Ventas, Inc. covenants that all shares of Common Stock which shall be so issuable shall, when issued or delivered, be duly and validly issued shares of Common Stock into which Securities of that series are convertible, and shall be fully paid and nonassessable, free of all liens and charges and not subject to preemptive rights and that, upon conversion, the appropriate capital stock accounts of Ventas, Inc. will be duly credited.

Section 12.10 Compliance with Governmental Requirements.

Ventas, Inc. covenants that if any shares of Common Stock required to be reserved for purposes of conversion of Securities hereunder require registration or listing with or approval of any governmental authority under any Federal or State law, pursuant to the Securities Act or the Exchange Act or any national or regional securities exchange on which Common Stock is listed at the time of delivery of any shares of Common Stock, before such shares may be issued upon conversion, Ventas, Inc. will use its best efforts to cause such shares to be duly registered, listed or approved, as the case may be.

Section 12.11 Payment of Taxes upon Certificates for Shares Issued upon Conversion.

The issuance of certificates for shares of Common Stock upon the conversion of Securities shall be made without charge to the converting Holders for any tax (including, without limitation, all documentary and stamp taxes) in respect of the issuance and delivery of such certificates, and such certificates shall be issued in the respective names of, or in such names as may be directed by, the Holders of the Securities converted; provided, however , that Ventas, Inc. shall not be required to pay any tax which may be payable in respect of any transfer involved in

the issuance and delivery of any such certificate in a name other than that of the Holder of the Security converted, and Ventas, Inc. shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance thereof shall have paid to Ventas, Inc. the amount of such tax or shall have established to the satisfaction of Ventas, Inc. that such tax has been paid.

Section 12.12 Trustee’s Duties with Respect to Conversion Provisions.

The Trustee and any conversion agent shall have no duty, responsibility or liability to any Holder to determine whether any facts exist which may require any adjustment of the conversion rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. Neither the Trustee nor any conversion agent shall be accountable with respect to the registration under securities laws, listing, validity or value (or the kind or amount) of any shares of Common Stock, or of any other securities or property, which may at any time be issued or delivered upon the conversion of any Security, and neither the Trustee nor any conversion agent makes any representation with respect thereto. Neither the Trustee nor any conversion agent shall be responsible for any failure of Ventas, Inc. to make any cash payment or to issue, transfer or deliver any shares of stock or stock certificates or other securities or property upon the surrender of any Security for the purpose of conversion; and the Trustee and any conversion agent, subject to the provisions of § 3.13 of the TIA, shall not be responsible for any failure of Ventas, Inc. to comply with any of the covenants of Ventas, Inc. contained in this Article 12.

ARTICLE 13

MISCELLANEOUS

Section 13.01 Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties will control.

Section 13.02 Notices.

Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuer and/or any Guarantor:

Ventas, Inc.
10350 Ormsby Park Place, Suite 300
Louisville, Kentucky 40223
Telecopier No.: (502) 357-9029
Attention: General Counsel

With a copy to:

Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Telecopier No.: (212) 728-8111
Attention: Leslie Mazza, Esquire

If to the Trustee:

U.S. Bank National Association
425 Walnut ML CN WN 06 CT
Cincinnati, Ohio 45202
Telecopier No.: (513) 632-5511
Attention: Corporate Trust Administration

The Issuer, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time.

Section 13.03 Communication by Holders of Securities with Other Holders of Securities.

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

Section 13.04 Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuer to the Trustee to take any action under this Indenture, the Issuer shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Notwithstanding the foregoing, in the case of any such request or application as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular request or application, no additional certificate or opinion need be furnished unless specifically required.

Section 13.05 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and must include:

(1) a statement that the Person making such certificate or opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

Section 13.06 Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee or stockholder of Ventas, Inc. or any of its Subsidiaries, as such, will have any liability for any obligations of Ventas, Inc. or any of its Subsidiaries under the Securities or this Indenture based on, in respect of, or by reason of such obligations or their creation. Each holder by accepting a Security waives and releases all such liability. The foregoing waiver and release are an integral part of the consideration for the issuance of the Securities.

Section 13.08 Governing Law.

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE SECURITIES AND THE SECURITIES GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 13.09 No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 13.10 Successors.

All agreements of the Issuer in this Indenture and the Securities will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Article 10 and any applicable indentures supplemental hereto.

Section 13.11 Severability.

In case any provision in this Indenture or in the Securities is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

Section 13.12 Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement.

Section 13.13 Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

Section 13.14 Benefits of Indenture.

Nothing in this Indenture, the Securities or the Securities Guarantees, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or an legal or equitable right, remedy or claim under this Indenture.

Section 13.15 Legal Holidays.

In any case where any Interest Payment Date, redemption date, purchase date or stated maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of such Security (other than a provision of such Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date, redemption date or purchase date, or at the stated maturity.

Section 13.16 Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of the Outstanding Securities of all series or one or more series, as the case may be, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer and any agent of the Trustee or the Issuer, if made in the manner provided in this Section.

(b) The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may be proved in any reasonable manner which the Trustee deems sufficient.

(d) If the Issuer shall solicit from the Holders of Securities any request, demand, authorization, direction, notice, consent, waiver or other act, the Issuer may, at its or their option, in or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other act, but the Issuer shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Registrar, any Paying Agent, any authenticating agent or the Issuer in reliance thereon, whether or not notation of such action is made upon such Security.

[Signatures on following page]

SIGNATURES

Dated as of September 26, 2013

Ventas, Inc.

By: /s/ T. Richard Riney

Name: T. Richard Riney
Title: Executive Vice President, Chief

Administrative Officer and General Counsel

Ventas Realty, Limited Partnership


By:	Ventas, Inc., its General Partner By: /s/ T. Richard Riney Name: T. Richard Riney Title: Executive Vice President, Chief

Administrative Officer and

General Counsel

TRUSTEE:

U.S. Bank National Association

By:

Name:
Title:

Schedule I

SCHEDULE OF GUARANTORS

The following schedule lists each entity as of the date of this Indenture which may, subject to provisions the Section 2.02 hereof, be a Guarantor under this Indenture:

Ventas, Inc.

Ventas Realty, Limited Partnership

SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE, dated as of July 1, 2011 (this "Supplemental Indenture"), among NATIONWIDE HEALTH PROPERTIES, INC., a Maryland corporation (the "Company"), NEEDLES ACQUISITION LLC, a Delaware limited liability company ("Merger Sub"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a

national banking association organized and existing under the laws of the United States, as successor trustee (the "Trustee"). Unless otherwise specified, capitalized terms used herein have the meaning assigned to them in the Indenture (as defined below).

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of August 19, 1997, by and between the Company and the Trustee (as amended, supplemented, or otherwise modified, the "Indenture"), pursuant to which the Company has issued $55,000,000 aggregate principal amount of the Company's 6.90% Medium Term Notes, Series C, due 2037 and $40,000,000 aggregate principal amount of the Company's 6.59% Medium-Term Notes, Series C, due 2038 (collectively, the "Notes");

WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as of February 27, 2011 (the "Merger Agreement"), with Ventas, Inc., a Delaware corporation ("Ventas"), and Merger Sub, pursuant to which, on the terms and conditions set forth therein, the Company will merge with and into Merger Sub (the "Merger"), with Merger Sub surviving as a wholly owned subsidiary of Ventas;

WHEREAS, (I) Merger Sub is a Delaware limited liability company and desires to assume the obligations of the Company under the Indenture; (2) immediately after giving effect to the Merger, no Event of Default (and no event which, after the notice or lapse of time or both, would become an Event of Default) will have occurred and be continuing; and (3) the Company has furnished, or caused to be furnished, to the Trustee, and the Trustee has received, (a) a copy of the resolutions of the Board of Directors of the Company authorizing the execution of this Supplemental Indenture and (b) an Officers' Certificate and an Opinion of Counsel, each stating that the Merger and this Supplemental Indenture comply with Article Eight of the Indenture and that all conditions precedent provided for in the Indenture related to the Merger have been complied with;

WHEREAS, pursuant to Section 901 of the Indenture, without the consent of any Holders of the Notes, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more supplemental indentures, in form satisfactory to the Trustee, to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company in the Indenture and in the Notes;

WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture have been complied with; and

WHEREAS, this Supplemental Indenture, and the amendments and waivers effected hereby, shall be effective and binding immediately upon its execution by the Company, Merger Sub and the Trustee.

NOW, THEREFORE, the Company and Merger Sub hereby covenant and agree with the Trustee for the equal and proportionate benefit of the Holders as follows:

ARTICLE 1

ASSUMPTION

Section 1.01 . Assumption. Merger Sub hereby expressly assumes, effective upon the consummation of the Merger, with the same effect as if Merger Sub had been named as the Company in the Indenture, the due and punctual payment of the principal of (and premium, if any) and interest on and any Additional Amounts payable with respect to, all the Notes and the performance of every covenant of the Indenture on the part of the Company to be performed or observed.

ARTICLE 2

MISCELLANEOUS

Section 2.01 Effect and Operation of Supplemental Indenture. This Supplemental Indenture shall be effective and binding immediately upon its execution by the Company, Merger Sub and the Trustee, and thereupon this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Note heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby. Except as modified and amended by this Supplemental Indenture, all provisions of the Indenture shall remain in full force and effect.

Section 2.02 Indenture and Supplemental Indenture Construed Together. This Supplemental Indenture is an indenture supplemental to and in implementation of the Indenture, and the Indenture and this Supplemental Indenture shall henceforth be read and construed together.

Section 2.03 Trust Indenture Act Controls. If any provision of the Indenture, as amended by this Supplemental Indenture, limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control.

Section 2.04 GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 2.05 Successors. All agreements of the Company in the Indenture, as amended by this Supplemental Indenture, and the Notes shall bind its successors. All agreements of the Trustee in the Indenture, as amended by this Supplemental Indenture, shall bind its successors.

Section 2.06 Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 2.07 Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

Section 2.08 Severability. In case any provision in the Indenture, as amended by this Supplemental Indenture, or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.09 The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company.

[ Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

NATIONWIDE HEALTH PROPERTIES, INC.

By: /s/ Abdo H. Khoury
Name: Abdo H. Khoury
Title: Chief Financial Officer & Portfolio Officer

Executive Vice President

NEEDLES ACQUISITION LLC

By: /s/ T. Richard Riney ______________

Name:

Title:

THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A.

By: /s/ Melonee Young
Name: Melonee Young
Title: Vice President

[Signature Page to Supplemental Indenture (1997 Indenture)]

Exhibit 12



STATEMENT REGARDING COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

	For the year ended December 31,
(dollars in thousands)	2016		2015		2014		2013		2012
Income before (loss) income from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest	$	518,508	$	351,675	$	350,703	$	364,178	$	176,379
Interest expense
Senior notes payable and other debt	419,740		367,114		292,065		249,009		199,801
Distributions from unconsolidated entities	7,598		23,462		6,508		6,641		10,006
Earnings	$	945,846	$	742,251	$	649,276	$	619,828	$	386,186
Interest
Senior notes payable and other debt expense	$	419,740	$	367,114	$	292,065	$	249,009	$	199,801
Interest capitalized	2,355		1,671		950		855		1,857
Fixed charges	$	422,095	$	368,785	$	293,015	$	249,864	$	201,658

Ratio of Earnings to Fixed Charges	2.24		2.01		2.22		2.48		1.92

Exhibit 21

SUBSIDIARIES OF VENTAS, INC.



Entity Name	Jurisdiction of Organization or Formation

1425 Hunt Club, LLC	Delaware
1445 Hunt Club, LLC	Delaware
14851 Yorba Street, LLC	Delaware
200 Andrews, LLC	South Carolina
2010 Union Limited Partnership	Washington
251 Medical Center, LLC	Delaware
253 Medical Center, LLC	Delaware
311 South Sarah, LLC	Delaware
745 West State Street, LLC	Delaware
755 Milwaukee MOB, LLC	Delaware
890 Professional MOB, LLC	Delaware
AHS Oklahoma Health System, LLP	Delaware
AHS Oklahoma Holdings, Inc.	Delaware
AHS Oklahoma Hospitals, Inc.	Delaware
AL (AP) Holding LLC	Delaware
AL (HCN) Holding LLC	Delaware
AL (MT) Holding LLC	Delaware
AL I/East Brunswick Senior Housing, LLC	Delaware
AL I/Glen Ellyn Senior Housing, LLC	Delaware
AL I/La Costa Senior Housing, LLC	Delaware
AL I/Naperville Senior Housing, LLC	Delaware
AL I/North Lynbrook Senior Housing, LLC	Delaware
AL I/Pinehurst Senior Housing, LLC	Delaware
AL I/Providence Senior Housing, LLC	Delaware
AL I/Richmond Senior Housing, LLC	Delaware
AL I/Stamford Senior Housing Living, LLC	Delaware
AL I/Woodcliff Lake Senior Housing, LLC	Delaware
AL III Investments, L.L.C.	Virginia
AL One Investments, LLC	Delaware
AL One PA Investments, LLC	Delaware
AL Subfunding II, LLC	Delaware
AL Subfunding LLC	Delaware
Albuquerque AL RE, L.P.	Delaware
ALH Holdings, LLC	Delaware
Allison Park Nominee LLC	Delaware
Allison Park Nominee LP	Delaware
Amber Meadow Retirement Ltd.	British Columbia
American Retirement Villas Properties II, LP	California
American Retirement Villas Properties III, LP	California
Anchor Cogdell Covington, LLC	Kentucky
Anchor Cogdell Doylestown GP, LLC	Pennsylvania
Anchor Cogdell Doylestown LP	Pennsylvania
Anchor Cogdell Florence, LLC	Kentucky
Anchor Cogdell, LLC	Delaware
ARCHCT Cambr Dallas, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
ARCHCT Cambr UWSC, LLC	Delaware
ARCHCT Dasco Odessa, LLC	Delaware
ARCHCT Dasco Peoria, LLC	Delaware
ARHC 80NEWNY01, LLC	Delaware
ARHC ADCRYIL01, LLC	Delaware
ARHC AHKENWI01 Member, LLC	Delaware
ARHC AHKENWI01, LLC	Delaware
ARHC AMATHGA01, LLC	Delaware
ARHC AMAVTFL01, LLC	Delaware
ARHC AMHTDWI01, LLC	Delaware
ARHC AMNNHWI01, LLC	Delaware
ARHC AMOFLMO01, LLC	Delaware
ARHC AMOFLMO02, LLC	Delaware
ARHC AMTRVWI01, LLC	Delaware
ARHC ASSTBSC01, LLC	Delaware
ARHC ATASHNC01 TRS, LLC	Delaware
ARHC ATASHNC01, LLC	Delaware
ARHC ATATHGA01 TRS, LLC	Delaware
ARHC ATATHGA01, LLC	Delaware
ARHC ATATLGA01 TRS, LLC	Delaware
ARHC ATATLGA01, LLC	Delaware
ARHC ATDECGA01 TRS, LLC	Delaware
ARHC ATDECGA01, LLC	Delaware
ARHC ATDECGA02 TRS, LLC	Delaware
ARHC ATDECGA02, LLC	Delaware
ARHC ATKNOTN01 TRS, LLC	Delaware
ARHC ATKNOTN01, LLC	Delaware
ARHC ATLARFL01 TRS, LLC	Delaware
ARHC ATLARFL01, LLC	Delaware
ARHC BCCHIIL01, LLC	Delaware
ARHC BHCOVGA01 TRS, LLC	Delaware
ARHC BHCOVGA01, LLC	Delaware
ARHC BHDOUGA01 TRS LLC	Delaware
ARHC BHDOUGA01, LLC	Delaware
ARHC BHNEWGA01 TRS LLC	Delaware
ARHC BHNEWGA01, LLC	Delaware
ARHC BHPALFL01 TRS LLC	Delaware
ARHC BHPALFL01, LLC	Delaware
ARHC BHPAWMI01, LLC	Delaware
ARHC BHSTOGA01 TRS LLC	Delaware
ARHC BHSTOGA01, LLC	Delaware
ARHC BHSUGGA01 TRS LLC	Delaware
ARHC BHSUGGA01, LLC	Delaware
ARHC BLDTNTX001, LLC	Delaware
ARHC BMBUCAZ01, LLC	Delaware
ARHC BMPCYFL01, LLC	Delaware
ARHC BMPCYFL02, LLC	Delaware
ARHC BPBRMWA01 TRS, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
ARHC BPBRMWA01, LLC	Delaware
ARHC BRBRITN01, LLC	Delaware
ARHC BTFMYFL01 TRS, LLC	Delaware
ARHC BTFMYFL01, LLC	Delaware
ARHC BTNAPFL01 TRS, LLC	Delaware
ARHC BTNAPFL01, LLC	Delaware
ARHC CAROCCA01 TRS, LLC	Delaware
ARHC CAROCCA01, LLC	Delaware
ARHC CCMKAIN01, LLC	Delaware
ARHC CHWLBNJ001, LLC	Delaware
ARHC CHWLBNJ002, LLC	Delaware
ARHC CKSFDPA01, LLC	Delaware
ARHC CKSFDPA02, LLC	Delaware
ARHC CKSFDPA03, LLC	Delaware
ARHC CLCRYIL01, LLC	Delaware
ARHC CSVANWA01 TRS, LLC	Delaware
ARHC CSVANWA01, LLC	Delaware
ARHC CTCRCNV001 LLC	Delaware
ARHC CTCTYNV01, LLC	Delaware
ARHC CVSALOR01 TRS, LLC	Delaware
ARHC CVSALOR01, LLC	Delaware
ARHC DDMTRAR001, LLC	Delaware
ARHC DDPLIIN01, LLC	Delaware
ARHC DDRKFIL001, LLC	Delaware
ARHC DMLSVNV001 LLC	Delaware
ARHC DRFTWIN01, LLC	Delaware
ARHC DRLITCO01, LLC	Delaware
ARHC ELEDMWA01 TRS, LLC	Delaware
ARHC ELEDMWA01, LLC	Delaware
ARHC EPLHAFL01, LLC	Delaware
ARHC ERELKMN01, LLC	Delaware
ARHC FCFAYGA01, LLC	Delaware
ARHC FDMTRLA01, LLC	Delaware
ARHC GBSNATX001 LLC	Delaware
ARHC GHANDSC01 TRS LLC	Delaware
ARHC GHANDSC01, LLC	Delaware
ARHC GRFTWTX01, LLC	Delaware
ARHC GWWSLOH01 TRS, LLC	Delaware
ARHC GWWSLOH01, LLC	Delaware
ARHC HFSFDMI01, LLC	Delaware
ARHC HRCYCA001, LLC	Delaware
ARHC HRININ001, LLC	Delaware
ARHC HRONWI001, LLC	Delaware
ARHC HRWAWI001, LLC	Delaware
ARHC LHPLNTX01, LLC	Delaware
ARHC LMFKNWI01, LLC	Delaware
ARHC LMFTWIN01, LLC	Delaware
ARHC LMGFDWI01, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
ARHC LPLLKFL01, LLC	Delaware
ARHC LPLLKFL01TRS, LLC	Delaware
ARHC LVHVSAZ01, LLC	Delaware
ARHC MHHOUTX01, LLC	Delaware
ARHC MHMISIN01, LLC	Delaware
ARHC MHWYOMI01, LLC	Delaware
ARHC MMMINND01, LLC	Delaware
ARHC MNPERIL001, LLC	Delaware
ARHC NCWTNNY01, LLC	Delaware
ARHC NFTSEFL01, LLC	Delaware
ARHC NSALBNY01, LLC	Delaware
ARHC NSMARGA01, LLC	Delaware
ARHC NSMARGA02, LLC	Delaware
ARHC NVPHXAZ01, LLC	Delaware
ARHC OCCOOOR01 TRS, LLC	Delaware
ARHC OCCOOOR01, LLC	Delaware
ARHC ORCOOOR01 TRS, LLC	Delaware
ARHC ORCOOOR01, LLC	Delaware
ARHC ORODSTX001, LLC	Delaware
ARHC PCNWNGA01, LLC	Delaware
ARHC PHHBGPA01, LLC	Delaware
ARHC PPKLAOR01 TRS, LLC	Delaware
ARHC PPKLAOR01, LLC	Delaware
ARHC PPMOLOR01 TRS, LLC	Delaware
ARHC PPMOLOR01, LLC	Delaware
ARHC PVCLAOR01 TRS, LLC	Delaware
ARHC PVCLAOR01, LLC	Delaware
ARHC RCAURIL01, LLC	Delaware
ARHC RCAURIL02, LLC	Delaware
ARHC Restora Participant, LLC	Delaware
ARHC RHGARNC01, LLC	Delaware
ARHC RHSALOR01 TRS, LLC	Delaware
ARHC RHSALOR01, LLC	Delaware
ARHC RMRIVGA01, LLC	Delaware
ARHC RRDALTX001 LLC	Delaware
ARHC RRHUSTX001, LLC	Delaware
ARHC SCTMBTX001 LLC	Delaware
ARHC SCTXRTX001, LLC	Delaware
ARHC SCWDSNJ01, LLC	Delaware
ARHC SFMIDVA01, LLC	Delaware
ARHC SHWYOMI01, LLC	Delaware
ARHC SMSFDMO01, LLC	Delaware
ARHC SMSTBSC01, LLC	Delaware
ARHC SMSVLTX01, LLC	Delaware
ARHC SOKTYTX01 TRS, LLC	Delaware
ARHC SOKTYTX01, LLC	Delaware
ARHC SPGUINY01, LLC	Delaware
ARHC SSBHMWA01 TRS, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
ARHC SSBHMWA01, LLC	Delaware
ARHC SSEVTWA01 TRS, LLC	Delaware
ARHC SSEVTWA01, LLC	Delaware
ARHC SVSCLCA01 TRS, LLC	Delaware
ARHC SVSCLCA01, LLC	Delaware
ARHC SWKLDTX01, LLC	Delaware
ARHC TCARLTX01, LLC	Delaware
ARHC TRS Holdco, LLC	Delaware
ARHC UCFOLCA01, LLC	Delaware
ARHC UCFOLCA02, LLC	Delaware
ARHC UHPTHMN01, LLC	Delaware
ARHC UWMNAWI001, LLC	Delaware
ARHC VCWICKS01, LLC	Delaware
ARHC VHCTMIL01, LLC	Delaware
ARHC VHEFFIL01, LLC	Delaware
ARHC VHHERIL01, LLC	Delaware
ARHC VHMSLIL01, LLC	Delaware
ARHC VHNWTIL01, LLC	Delaware
ARHC VHSVLIL01, LLC	Delaware
ARHC VSHOUTX01, LLC	Delaware
ARHC VSJBREIL01, LLC	Delaware
ARHC VURMDVA01, LLC	Delaware
ARHC WCROCIL01 TRS, LLC	Delaware
ARHC WCROCIL01, LLC	Delaware
ARHC WEMINND01, LLC	Delaware
ARHC WMABQNM01 TRS, LLC	Delaware
ARHC WMABQNM01, LLC	Delaware
ARHC WMSUNAZ01 TRS, LLC	Delaware
ARHC WMSUNAZ01, LLC	Delaware
ASL Leasehold Sub, LLC	Delaware
Atria Collier Park, LLC	Delaware
Atria Lynnbrooke (Irvine), L.P.	Delaware
Atria Lynnbrooke G.P., L.L.C.	Delaware
Atria Meridian , LLC	Delaware
Atria Northgate Park, LLC	Delaware
Atria Shorehaven, LLC	Delaware
Atria Vista del Rio, LLC	Delaware
Atrium at Weston Place, LLC	Tennessee
Augusta Medical Partners, LLC	Georgia
Augusta Medical Plaza, LLC	Delaware
Augusta Professional Building, LLC	Delaware
Baltimore Garage Funding, LLC	Maryland
Baltimore Life Sciences Research Park, LLC	Delaware
Baltimore LSRP One, Business Trust	Maryland
Baltimore LSRP Two, Business Trust	Maryland
Barclay Downs Associates, LP	North Carolina
BCC Altoona Realty GP, LLC	Delaware
BCC Altoona Realty, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
BCC Altoona Realty, LP	Delaware
BCC Berwick Realty GP, LLC	Delaware
BCC Berwick Realty, LLC	Delaware
BCC Berwick Realty, LP	Delaware
BCC Lewistown Realty GP, LLC	Delaware
BCC Lewistown Realty, LLC	Delaware
BCC Lewistown Realty, LP	Delaware
BCC Martinsburg Realty, LLC	Delaware
BCC Medina Realty, LLC	Delaware
BCC Mid Valley Operations, LLC	Delaware
BCC Ontario Realty, LLC	Delaware
BCC Reading Realty GP, LLC	Delaware
BCC Reading Realty, LLC	Delaware
BCC Reading Realty, LP	Delaware
BCC Shippensburg Realty, LLC	Delaware
BCC State College Realty GP, LLC	Delaware
BCC State College Realty, LLC	Delaware
BCC State College Realty, LP	Delaware
BCC Washington Township Realty, LLC	Delaware
Bedford AL RE, Ltd.	Texas
BioPark Fremont, LLC	Delaware
BLC of California - San Marcos, L.P.	Delaware
BLSRP Funding I, LLC	Delaware
Bonney Lake MOB Investors LLC	Washington
Brandon MOB Investors, LLC	Mississippi
Brandon Retirement Group Ltd.	British Columbia
BRDG Park at Danforth Center, LLC	Missouri
Brookdale Holdings, LLC	Delaware
Brookdale Living Communities of Arizona-EM, LLC	Delaware
Brookdale Living Communities of California, LLC	Delaware
Brookdale Living Communities of California-RC, LLC	Delaware
Brookdale Living Communities of California-San Marcos, LLC	Delaware
Brookdale Living Communities of Connecticut, LLC	Delaware
Brookdale Living Communities of Florida-CL, LLC	Delaware
Brookdale Living Communities of Illinois-2960, LLC	Delaware
Brookdale Living Communities of Illinois-HV, LLC	Delaware
Brookdale Living Communities of Illinois-II, LLC	Delaware
Brookdale Living Communities of Massachusetts-RB, LLC	Delaware
Brookdale Living Communities of Minnesota, LLC	Delaware
Brookdale Living Communities of New Jersey, LLC	Delaware
Brookdale Living Communities of New York-GB, LLC	Delaware
Brookdale Living Communities of Washington-PP, LLC	Delaware
Brunswick MOB, LLC	Georgia
BSG CS, LLC (f/k/a BSG Erdman, LLC)	Wisconsin
BSP Holding, LLC	Maryland
BSP Three Holding, LLC	Delaware
Buffalo Grove ACC, LLC	Delaware
Building Two Cafe, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Burlington Retirement Group Ltd.	British Columbia
Cabarrus Medical Partners, LP	North Carolina
Cabarrus POB, LP	North Carolina
Calgarian Retirement Group II Ltd.	British Columbia
Cambridge Development, L.L.C.	New York
Canyon Meadows Retirement Ltd.	British Columbia
Carolina Forest Plaza, LLC	South Carolina
Carroll Medical Office Associates, LLC	Delaware
Carroll Medical Office Holdings, LLC	Delaware
Carrollwood Assisted Living, Ltd.	Texas
Casper Wyoming Hospital, LLC	Delaware
Chippewa Nominee LLC	Delaware
Chippewa Nominee LP	Delaware
Clackamas Woods Assisted Living, LLC	Oregon
Clayton County AL RE, L.P.	Delaware
Coast to Coast Assisted Living Realty, LLC	New York
Cobb County AL RE, L.P.	Delaware
Cogdell Cleveland Rehab, L.P.	Ohio
Cogdell Duluth MOB, LLC	Minnesota
Cogdell Health Campus MOB, LP	Pennsylvania
Cogdell Investors (Birkdale II), LP	North Carolina
Cogdell Investors (Birkdale), LP	North Carolina
Cogdell Investors (Mallard), LP	North Carolina
Cogdell Investors (OSS), LP	North Carolina
Cogdell Lancaster Rehab, LP	Pennsylvania
Cogdell Spencer Advisors Management, LLC	Delaware
Cogdell Spencer Advisors, LLC	Delaware
Cogdell Spencer LP	Delaware
Cogdell Spencer TRS Holdings, LLC	Delaware
Colleton Medical Arts, LLC	Delaware
Collwood Knolls	California
Collwood Knolls Acquisition L.L.C.	Delaware
Columbia Medical Plaza, LLC	Delaware
Consera BSD, LLC	Delaware
Consera Healthcare Real Estate LLC	South Carolina
Copperfield MOB, LP	North Carolina
CPH MOB, LLC	Delaware
Cranford Development, LLC	Delaware
CRB Investors, LLC	Delaware
Crimson Dorset Limited	United Kingdom
Crimson Dorset Properties Limited	United Kingdom
Crystal View Lodge Ltd.	British Columbia
CS Business Trust I	Maryland
CS Business Trust II	Maryland
CSA Medical Partners Management, LLC	Delaware
Cutter Mill, LLC	Delaware
Dillsburg Nominee LLC	Delaware
Dillsburg Nominee LP	Delaware



Entity Name	Jurisdiction of Organization or Formation
Drexel University City Development, LLC	Pennsylvania
DV Greenville MOB LLC	Delaware
DV Parker II MOB LLC	Delaware
EA-BSB 2, L.L.C.	Delaware
East Houston Medical Plaza, LLC	Delaware
East Houston MOB, LLC	Delaware
East Jefferson Medical Office Building Limited Partnership	Louisiana
East Jefferson Medical Plaza, LLC	Louisiana
East Jefferson Medical Specialty Building	Louisiana
East Northport, LLC	Delaware
East Rocky Mount Kidney Center Associates, LP	North Carolina
EC Halcyon Realty, LLC	Delaware
EC Hamilton Place Realty, LLC	Delaware
EC Jackson Realty, LLC	Delaware
EC Knoxville Realty, LLC	Delaware
EC Lebanon Realty, LLC	Delaware
EC Martinez Realty, LLC	Delaware
EC Muncie Realty, LLC	Delaware
EC Roswell Realty, LLC	Delaware
EC Timberlin Parc Realty, LLC	Delaware
Edmonton Retirement Group Ltd.	British Columbia
Eglise Properties Limited	United Kingdom
Elder Healthcare Developers, LLC	Georgia
ElderTrust	Maryland
ESL Holdings, LLC	Delaware
ET Belvedere Finance, L.L.C.	Delaware
ET Berkshire, LLC	Delaware
ET Capital Corp.	Delaware
ET DCMH Finance, L.L.C.	Delaware
ET GENPAR, L.L.C	Delaware
ET Lehigh, LLC	Delaware
ET Pennsburg Finance, L.L.C.	Delaware
ET POBI Finance, L.L.C.	Delaware
ET Sanatoga, LLC	Delaware
ET Sub-Belvedere Limited Partnership, L.L.P.	Virginia
ET Sub-Berkshire Limited Partnership	Delaware
ET Sub-DCMH Limited Partnership, L.L.P	Virginia
ET Sub-Heritage Woods, L.L.C.	Delaware
ET Sub-Highgate, L.P.	Pennsylvania
ET Sub-Lehigh Limited Partnership	Delaware
ET Sub-Lopatcong, L.L.C.	Delaware
ET Sub-Pennsburg Manor Limited Partnership, L.L.P.	Virginia
ET Sub-POB I Limited Partnership, L.L.P.	Virginia
ET Sub-Sanatoga Limited Partnership	Delaware
ET Sub-Wayne I Limited Partnership, L.L.P.	Virginia
ET Wayne Finance, L.L.C.	Delaware
Facility at Tanasbourne JV1, LLC	Delaware
Fair Oak Assisted Living L.L.C.	Delaware



Entity Name	Jurisdiction of Organization or Formation
Florence Realty, LLC	Delaware
Franciscan Development Company, LLC	North Carolina
Fredericton Retirement Group Ltd.	British Columbia
Gaston MOB, LP	North Carolina
Good Sam MOB Investors, LLC	Washington
Grayslake MOB, LLC	Delaware
Greenville MOB Owners LLC	Delaware
Gurnee ACC, LLC	Delaware
Gurnee Centre Club, LLC	Delaware
Gurnee Imaging Center, LLC	Delaware
Hamilton Retirement Group Ltd.	British Columbia
Hanover MOB, LLC	Virginia
Harrisburg Medical Clinic, LP	North Carolina
Health Park MOB, LLC	Tennessee
Hendersonville Nominee LLC	Delaware
Hendersonville Nominee LP	Delaware
Hendersonville Realty, LLC	Delaware
Henrico MOB, LLC	Delaware
Hershey Research One, LLC	Delaware
Hershey Research Two, LLC	Delaware
Hillhaven Properties, LLC (formerly Hillhaven Properties, LTD, an Oregon LTD)	Delaware
HMOB Associates, L.P.	South Carolina
HPSMLD Limited Liability Company	Wisconsin
HRI Coral Springs, LLC	Delaware
HRI Tamarac, LLC	Delaware
HVMLD Limited Liability Company	Wisconsin
Indianapolis MOB, LLC	Indiana
IPC (AP) Holding LLC	Delaware
IPC (HCN) Holding LLC	Delaware
IPC (MT) Holding LLC	Delaware
Jensen Construction Management, Inc.	California
JER/NHP Management Texas, LLC	Texas
JER/NHP Senior Housing, LLC	Delaware
JER/NHP Senior Living Acquisition, LLC	Delaware
JER/NHP Senior Living Kansas, Inc.	Kansas
JER/NHP Senior Living Kansas, LLC	Delaware
JER/NHP Senior Living Texas, L.P.	Texas
JHL Associates, LLC	South Carolina
JJS Properties, Inc.	Delaware
JSL Autumn Hills, LLC	Delaware
JSL Blossom Grove, LP	Delaware
JSL Caleo Bay, LP	Delaware
JSL Copper Canyon, LLC	Delaware
JSL Glen Oaks, LLC	Delaware
JSL High Plains, LLC	Delaware
JSL Maple Wood, LLC	Delaware
JSL North Ridge, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
JSL Prairie Meadows, LLC	Delaware
JSL Rock Creek, LLC	Delaware
Karrington of Park Ridge L.L.C.	Ohio
Kentwood AL RE Limited Partnership	Delaware
Kew Gardens Senior Development, LLC	New York
Kingsport Nominee I LLC (f/k/a Kingsport Nominee LP)	Delaware
Kingsport Nominee LLC	Delaware
Kingston Retirement Group Ltd.	British Columbia
Knoxville Nominee I LLC (f/k/a Knoxville Nominee LP)	Delaware
Knoxville Nominee LLC	Delaware
KS01 Series B Owner, LLC	Delaware
KS02 Series B Owner, LLC	Delaware
Lakeside POB 1, LLC	Delaware
Lakeside POB 2, LLC	Delaware
Lakeview Medical Office Building, LLC	Delaware
Lakeview Medical Plaza, LLC	Delaware
Lakeview Surgery Center, LLC	Delaware
Larkfield Gardens Associates, L.P.	New York
LBS Limited Partnership	Wisconsin
Lebanon Nominee LLC	Delaware
Lebanon Nominee LP	Delaware
Lethbridge Retirement Group Ltd.	British Columbia
Lewisburg Nominee LLC	Delaware
Lewisburg Nominee LP	Delaware
LHP B LP Partner, LLC	Delaware
LHP B Trust	Maryland
LHP B Trust, LLC	Delaware
LHP B Trust, LP	Delaware
LHPT Appleton AHI, LLC	Delaware
LHPT Appleton MO South, LLC	Delaware
LHPT Appleton MO West, LLC	Delaware
LHPT Ascension Round Rock GP, LLC	Delaware
LHPT Ascension Round Rock LP	Delaware
LHPT Birmingham THE, LLC	Delaware
LHPT Birmingham, LLC	Delaware
LHPT Columbus II THE, LLC	Delaware
LHPT Columbus THE, LLC	Delaware
LHPT Columbus, LLC	Delaware
LHPT DC GP, LLC	Delaware
LHPT DC THE, L.P.	Delaware
LHPT Decatur II, LLC	Delaware
LHPT Decatur, LLC	Delaware
LHPT Holdings II, LLC	Delaware
LHPT LilliCal, LLC	Delaware
LHPT LP Partners, LLC	Delaware
LHPT TCMC Aylward, LLC	Delaware
LHPT TCMC Pavilion, LLC	Delaware
LHRET 191, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
LHRET Anderson, LLC	Delaware
LHRET Ascension Austin II, LP	Delaware
LHRET Ascension Austin Partner GP, LLC	Delaware
LHRET Ascension Austin Partner II GP, LLC	Delaware
LHRET Ascension Austin, L.P.	Delaware
LHRET Ascension KC, LLC	Delaware
LHRET Ascension Michigan, LLC	Delaware
LHRET Ascension SJ, LLC	Delaware
LHRET Ascension SV, LLC	Delaware
LHRET Ascension SW Michigan, LLC	Delaware
LHRET Ascension, LLC	Delaware
LHRET CSM, LLC	Delaware
LHRET Hershey II, LLC	Delaware
LHRET Hershey, L.P.	Delaware
LHRET Hershey, LLC	Delaware
LHRET Lafayette, LLC	Delaware
LHRET LHT, LLC	Delaware
LHRET Michigan Land, LLC	Delaware
LHRET Michigan THE, LLC	Delaware
LHRET Michigan, LLC	Delaware
LHRET Partner, LLC	Delaware
LHRET Reading I, LLC	Delaware
LHRET Reading II, LLC	Delaware
LHRET Reading, L.P.	Delaware
LHRET Reading, LLC	Delaware
LHRET St. Louis THE, LLC	Delaware
LHRET St. Louis, LLC	Delaware
LHRET Wheat Ridge, LLC	Delaware
LHT Beech Grove LLC	Delaware
LHT Knoxville II, LLC	Delaware
LHT Knoxville Properties, LLC	Delaware
LHT North Atlanta, LLC	Delaware
LHT Phoenix, LLC	Delaware
Libertyville Centre Club, LLC	Delaware
Lillibridge Facilities Development, Inc.	Delaware
Lillibridge Healthcare Properties Trust	Maryland
Lillibridge Healthcare Properties Trust, L.P.	Delaware
Lillibridge Healthcare Properties Trust, LLC	Delaware
Lillibridge Healthcare Real Estate Trust	Maryland
Lillibridge Healthcare Real Estate Trust, L.P.	Delaware
Lillibridge Healthcare Services II, Inc.(f/k/a Cogdell Spencer Erdman Management Company)	North Carolina
Lillibridge Healthcare Services, Inc.	Illinois
LilliCal, LLC	Delaware
Lima Nominee LLC	Delaware
Lima Nominee LP	Delaware
LO Limited Partnership	Wisconsin
Loyalsock Nominee LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Loyalsock Nominee LP	Delaware
LS 3675 Market Street JV, LLC	Delaware
LTMLD Limited Liability Company	Wisconsin
MAB Parent LLC	Delaware
Madison MOB Investors, LLC	Mississippi
Mansfield MOB, LLC	Delaware
Marland Place Associates Limited Partnership	Massachusetts
Mary Black Westside Medical Park I Limited Partnership	South Carolina
McShane/NHP JV, LLC	Delaware
Medical Arts Courtyard, LLC	Delaware
Medical Investors I, LP	North Carolina
Medical Investors III, LP	South Carolina
Medical Park Three Limited Partnership	South Carolina
Minot Avenue Realty, LLC	Maine
Missoula Senior Housing Facility, LLC	Oregon
MLD Banning Investment, LLC	California
MLD Delaware Trust	Delaware
MLD Financial Capital Corporation	Delaware
MLD MOB Indiana, LLC	Delaware
MLD Properties II, Inc.	Delaware
MLD Properties Limited Partnership	Delaware
MLD Properties, Inc.	Delaware
MLD Texas Corporation	Texas
MLD Wisconsin ALF, Inc.	Delaware
MLD Wisconsin SNF, Inc.	Delaware
Montreal Retirement Group Ltd.	British Columbia
MS Barrington SH, LLC	Delaware
MS Bon Air SH, LLC	Delaware
MS Carmichael SH, LP	Delaware
MS Cascade SH, LLC	Delaware
MS Chandler SH, LLC	Delaware
MS Cinco Ranch SH, LLC	Delaware
MS Fort Worth SH, LLC	Delaware
MS Frisco SH, LLC	Delaware
MS Holladay SH, LLC	Delaware
MS Jackson SH, LLC	Delaware
MS Jacksonville SH, LLC	Delaware
MS Leawood SH, LLC	Delaware
MS Lower Makefield SH, LLC	Delaware
MS Old Meridian SH, LLC	Delaware
MS Overland Park SH, LLC	Delaware
MS River Road SH, LLC	Delaware
Mulberry Estates Ltd.	British Columbia
Mulberry Medical Park Limited Partnership	North Carolina
Mustang Holdings, LLC (f/k/a Ventas Mustang Holdings, LLC, f/k/a Ventas Casper Holdings, LLC)	Delaware
Nationwide ALF, Inc.	Delaware
Nationwide ALF-Pensacola, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Nationwide Careage San Jose Partnership	California
Nationwide Health Properties, LLC	Delaware
New Portland Road Realty, LLC	Maine
NH Texas Properties Limited Partnership	Texas
NHP Bedford G.P., LLC	Texas
NHP Brownstown, LLC	Delaware
NHP Carillon, LLC	Delaware
NHP Centereach, LLC	Delaware
NHP GP LLC	Delaware
NHP Houston MOB LLC	Delaware
NHP HS Holding, Inc.	Texas
NHP Huntsville MOB LLC	Delaware
NHP Madison, LLC	New York
NHP Master RE G.P., LLC	Delaware
NHP McClain, LLC	Delaware
NHP Operating Partnership L.P.	Delaware
NHP SB 399-401 East Highland, LLC	Delaware
NHP Secured, Inc.	California
NHP SH Alabama, LLC	Delaware
NHP SH Florida, LLC	Delaware
NHP SH Georgia, LLC	Delaware
NHP SH Mississippi, LLC	Delaware
NHP SH Oklahoma, LLC	Delaware
NHP SH Tennessee, LLC	Delaware
NHP Tucson Health Care Associates Limited Partnership	Delaware
NHP Veritas FL, LLC	Delaware
NHP Villas, Inc.	California
NHP Washington ALF, LLC	Delaware
NHP WI Denmark, LLC	Delaware
NHP WI Franklin, LLC	Delaware
NHP WI Green Bay, LLC	Delaware
NHP WI Kenosha, LLC	Delaware
NHP WI Madison, LLC	Delaware
NHP WI Manitowoc, LLC	Delaware
NHP WI McFarland, LLC	Delaware
NHP WI Menomonee Falls, LLC	Delaware
NHP WI Racine, LLC	Delaware
NHP WI Rapids, LLC	Delaware
NHP WI Sheboygan, LLC	Delaware
NHP WI Stevens Point, LLC	Delaware
NHP WI Stoughton, LLC	Delaware
NHP WI Two Rivers, LLC	Delaware
NHP WI Wausau, LLC	Delaware
NHP Wisconsin Development LLC	Wisconsin
NHP Wisconsin II, LLC	Delaware
NHP Wood Ridge LLC	Delaware
NHP/Broe II, LLC	Delaware
NHP/Broe, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
NHP/McShane SAMC, LLC	Delaware
NHP/Nexcore Irmo, LLC	Delaware
NHP/PMB Burbank Medical Plaza I, LLC	Delaware
NHP/PMB Burbank Medical Plaza II, LLC	Delaware
NHP/PMB Chula Vista, LLC	Delaware
NHP/PMB Del E. Webb Medical Plaza, LLC	Delaware
NHP/PMB Eden Medical Plaza, LLC	Delaware
NHP/PMB Gilbert LLC	Delaware
NHP/PMB GP LLC	Delaware
NHP/PMB Grossmont GP, LLC	Delaware
NHP/PMB Grossmont, LP	Delaware
NHP/PMB Kenneth E. Watts Medical Plaza, LLC	Delaware
NHP/PMB L.P.	Delaware
NHP/PMB Mission Viejo, LLC	Delaware
NHP/PMB Orange, LLC	Delaware
NHP/PMB Pasadena LLC	Delaware
NHP/PMB Pomerado, LLC	Delaware
NHP/PMB Pomona, LLC	Delaware
NHP/PMB San Gabriel Valley Medical Plaza, LLC	Delaware
NHP/PMB Santa Clarita Valley Medical Plaza, LLC	Delaware
NHP/PMB St. Francis Lynwood Medical Plaza, LLC	Delaware
NHP/PMB Tuality 7th Avenue Medical Plaza, LLC	Delaware
NHP/PMBRES LLC	Delaware
NHPCO Wisconsin Lender, LLC	Delaware
NHPCO Wisconsin, LLC	Delaware
NHP-Cobb Physicians Center, LLC	Delaware
NHP-Parkway Physicians Center, LLC	Delaware
Niagara Falls Retirement Group Ltd.	British Columbia
North Shore MOB #1, LLC	Delaware
North Shore MOB #2, LLC	Delaware
NV Briargate MOB LLC	Delaware
NV Broadway MOB LLC	Delaware
NV Gateway MOB LP	Delaware
NV GVR MOB LLC	Delaware
NV HFH MOB LLC	Delaware
NV Knightdale MOB LLC	Delaware
NV NB MOB LP	Delaware
NV NBHQ LP	Delaware
NV Potomac MOB LLC	Delaware
NV Printers Park MOB LLC	Delaware
NV Solano MOB LP	Delaware
NV Vaca Valley MOB LP	Delaware
OHT Limited Partnership	Wisconsin
Orangeburg Medical Office Building	South Carolina
Ottawa Retirement Group Ltd.	British Columbia
Parker II MOB Owners LLC	Delaware
Parkridge MOB, LLC	South Carolina
PDP Castro Valley #2 LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
PDP Mission Hills 1 LLC	Delaware
Peerless MOB, LLC	Tennessee
Peterborough Retirement Group Ltd.	British Columbia
Phase 1 Ventures LLC	Delaware
PKR Associates LLC	Pennsylvania
PMB Real Estate Services LLC	Delaware
PMB Vancouver 601 Physicians Pavilion LLC	Delaware
PMB Vancouver 602 Admin LLC	Delaware
PMB Vancouver 603 MedCtr Physicians LLC	Delaware
PMB Vancouver 604 Memorial MOB LLC	Delaware
PMB Vancouver 605 Salmon Creek LLC	Delaware
PMB Vancouver 606 Fisher's Landing LLC	Delaware
PMB Vancouver 607 Healthy Steps LLC	Delaware
PMB/NHP Vancouver Partners LLC	Delaware
PMOB, LLC	South Carolina
Primrose Chateau Retirement Ltd.	British Columbia
Prince George Retirement Group Ltd.	British Columbia
Prometheus Fund Alternative Partnership L.P.	Delaware
Prometheus Fund Coinvestment Partnership I LP	Delaware
Prometheus Fund II Alternative Partnership L.P.	Delaware
Prometheus Fund Senior Housing Partners LP	Delaware
Prometheus Fund Strategic Realty Investors II L.P.	Delaware
Prometheus Funds GP, LLC	Delaware
Prometheus Leasehold Parent, LLC	Delaware
Prometheus Senior Quarters LLC	Delaware
PSLT GP, LLC	Delaware
PSLT OP, L.P.	Delaware
PSLT-ALS Properties Holdings, LLC	Delaware
PSLT-ALS Properties I, LLC	Delaware
PSLT-ALS Properties II, LLC	Delaware
PSLT-ALS Properties III, LLC	Delaware
PSLT-ALS Properties IV, LLC	Delaware
PSLT-BLC Properties Holdings, LLC	Delaware
Red Deer Retirement Group Ltd.	British Columbia
Regina Retirement Group Ltd.	British Columbia
Retirement Inns II, LLC	Delaware
Retirement Inns III, LLC	Delaware
River Hills Medical Associates, LLC	South Carolina
River Oaks Partners	Illinois
Riverdale Development, LLC	New York
RLJ Corp.	Massachusetts
Rocky Mount Kidney Center Associates	North Carolina
Rocky Mount Medical Park Limited Partnership	North Carolina
Roper MOB, LLC	South Carolina
Round Lake ACC, LLC	Delaware
Rowan OSC Investors, LP	North Carolina
RSP, Inc.	Massachusetts
Sagamore Hills Nominee LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Sagamore Hills Nominee LP	Delaware
Saint John Retirement Group Ltd.	British Columbia
Saxonburg Nominee LLC	Delaware
Saxonburg Nominee LP	Delaware
SC EC Master Tenant, LLC	Delaware
Senior Care, Inc.	Delaware
Senior Quarters Operating Corp.	New York
Shippensburg Realty Holdings, LLC	Delaware
Springs at Clackamas Woods, LLC	Oregon
SQR Investors, LLC	Delaware
SQR Opco, LLC	Delaware
SQR Propco, LLC	Delaware
St. Albert Retirement Group Ltd.	British Columbia
St. Catharines Retirement Group Ltd.	British Columbia
St. Cloud MOB, LLC	Minnesota
St. Francis Community MOB, LLC	South Carolina
St. Francis Medical Plaza, LLC	South Carolina
St. Mary's Investors, LLC	Virginia
Steger Retirement Group Ltd.	British Columbia
Stratford Development, LLC	New York
Stripe II, LLC	Delaware
Stripe Sub, LLC	Delaware
SW Louisiana Professional Office Building, LLC	Delaware
Syracuse MOB SPE, LLC	Delaware
Syracuse MOB, LLC	New York
SZR Abington AL, L.L.C.	Pennsylvania
SZR Acquisitions, LLC	Delaware
SZR Arlington, MA Assisted Living, L.L.C.	Virginia
SZR Aurora GP Inc.	Ontario, Canada
SZR Aurora Inc.	Ontario, Canada
SZR Aurora, LP	Ontario, Canada
SZR Barrington, LLC	Delaware
SZR Bloomfield Senior Living, LLC	Delaware
SZR Bloomingdale Assisted Living, L.L.C.	Illinois
SZR Blue Bell AL Limited Partnership	Pennsylvania
SZR Bon Air, LLC	Delaware
SZR Buffalo Grove Assisted Living, L.L.C.	Illinois
SZR Burlington Inc.	Ontario, Canada
SZR Carmichael, LLC	Delaware
SZR Cascade, LLC	Delaware
SZR Chandler, LLC	Delaware
SZR Cherry Creek Senior Living, LLC	Delaware
SZR Cinco Ranch, LLC	Delaware
SZR Columbia LLC	Delaware
SZR Cuyahoga Falls Senior Living, LLC	Delaware
SZR East Cobb Assisted Living Limited Partnership	Georgia
SZR Edina Assisted Living, L.L.C.	Minnesota
SZR Erin Mills GP Inc.	Ontario, Canada



Entity Name	Jurisdiction of Organization or Formation
SZR Erin Mills Inc.	Ontario, Canada
SZR Erin Mills, LP	Ontario, Canada
SZR First Assisted Living Holdings, LLC	Delaware
SZR Fleetwood A.L., L.L.C.	New York
SZR Fort Worth, LLC	Delaware
SZR Frisco, LLC	Delaware
SZR Granite Run AL, L.L.C.	Pennsylvania
SZR Haverford AL, L.L.C.	Pennsylvania
SZR Hillcrest Senior Living, LLC	Delaware
SZR Holladay, LLC	Delaware
SZR Huntcliff Assisted Living Limited Partnership	Georgia
SZR Ivey Ridge Assisted Living Limited Partnership	Georgia
SZR Jackson, LLC	Delaware
SZR Jacksonville, LLC	Delaware
SZR Leawood, LLC	Delaware
SZR Lincoln Park LLC	Delaware
SZR Lower Makefield, LLC	Delaware
SZR Markham Inc.	Ontario, Canada
SZR Mission Viejo Assisted Living, L.L.C.	Virginia
SZR Mississauga Inc.	Ontario, Canada
SZR Morris Plains Assisted Living, L.L.C.	New Jersey
SZR New City Senior Living, LLC	Delaware
SZR North Ann Arbor Senior Living, LLC	Delaware
SZR North Hills LLC	Delaware
SZR North York GP Inc.	Ontario, Canada
SZR North York Inc.	Ontario, Canada
SZR Northville Assisted Living, L.L.C.	Michigan
SZR Norwood LLC	Delaware
SZR Oakville Inc.	Ontario, Canada
SZR of Alexandria Assisted Living, L.P.	Virginia
SZR of North York, LP	Ontario, Canada
SZR Old Meridian, LLC	Delaware
SZR Old Tappan Assisted Living, L.L.C.	New Jersey
SZR Orchard AL, L.L.C.	Colorado
SZR Overland Park, LLC	Delaware
SZR Pacific Palisades Assisted Living, L.P.	California
SZR Palos Park, LLC	Virginia
SZR Parma Assisted Living, L.L.C.	Virginia
SZR Richmond Hill Inc.	Ontario, Canada
SZR River Road, LLC	Delaware
SZR Riverside Assisted Living, L.P.	California
SZR Rochester Assisted Living, LLC	Delaware
SZR Rocklin Senior Living, LLC	Delaware
SZR Rockville LLC	Delaware
SZR San Mateo LLC	Delaware
SZR Sandy Senior Living, LLC	Delaware
SZR Scottsdale, LLC	Delaware
SZR Second Assisted Living Holdings, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
SZR Second Baton Rouge Assisted Living, L.L.C.	Louisiana
SZR Second Westminister Assisted Living, L.L.C.	Colorado
SZR Smithtown A.L., L.L.C.	New York
SZR Springfield Assisted Living, L.L.C.	Virginia
SZR Staten Island SL, L.L.C.	New York
SZR Sterling Canyon Assisted Living Limited Partnership	California
SZR Troy Assisted Living, L.L.C.	Michigan
SZR US Investments, LLC	Delaware
SZR US UPREIT Three, LLC	Delaware
SZR US UPREIT, LLC	Delaware
SZR Wall Assisted Living, L.L.C.	New Jersey
SZR Wayne Assisted Living, L.L.C.	New Jersey
SZR Westfield Assisted Living, L.L.C.	New Jersey
SZR Westlake Village LLC	Delaware
SZR Willowbrook Annex LLC	Delaware
SZR Willowbrook LLC	Delaware
SZR Windsor Inc.	Ontario, Canada
SZR Yorba Linda LLC	Delaware
Tempe AL RE, L.P.	Delaware
The Arboretum I Limited Partnership	Wisconsin
The Arboretum II Limited Partnership	Wisconsin
The Ponds of Pembroke Limited Partnership	Illinois
The Terrace at South Meadows, LLC	Delaware
THL 191 JV, LLC	Delaware
TLQ, Inc.	Massachusetts
Townsend Chicago, LLC	Delaware
Townsend CRB Development, LLC	Delaware
Tucson AL RE, L.P.	Delaware
University Medical Center Tamarac, LLC	Delaware
VB Ballwin SH, LLC	Delaware
VB Opco Holdings, LLC	Delaware
VB Propco Holdings, LLC	Delaware
VCC Healthcare Fund, LLC (f/k/a Ventas Healthcare Capital, LLC, f/k/a Ventas Sun LLC)	Delaware
Ventas AH Granbury, LLC	Delaware
Ventas AH Lewisville, LLC	Delaware
Ventas AH Midwest, LLC	Delaware
Ventas AH Mustang, LLC	Delaware
Ventas AH Norman, LLC	Delaware
Ventas AH Reminisce, LLC	Delaware
Ventas AH Rockwall, LLC	Delaware
Ventas AH Temple, LLC	Delaware
Ventas AH Weatherford, LLC	Delaware
Ventas Amberleigh, LLC	Delaware
Ventas AOC Operating Holdings, Inc.	Delaware
Ventas AOC Operating Holdings, LLC	Delaware
Ventas Arlington, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Ventas Bayshore Medical, LLC	Delaware
Ventas Bear Canyon, LLC	Delaware
Ventas Birch Heights, LLC	Delaware
Ventas Bishop Place, LLC	Delaware
Ventas Bonaventure, LP	Delaware
Ventas Broadway MOB, LLC	Delaware
Ventas CA GP Holdings I, LLC	Delaware
Ventas Caley Ridge Holding, LLC	Delaware
Ventas Caley Ridge, LLC	Delaware
Ventas Canada Finance Limited (f/k/a 3280986 Nova Scotia Limited)	Nova Scotia
Ventas Canada Retirement I GP ULC (f/k/a Holiday Canada Retirement I GP ULC)	Nova Scotia
Ventas Canada Retirement I LP (f/k/a Holiday Canada Retirement I LP)	Ontario
Ventas Canada Retirement II GP ULC (f/k/a Holiday Canada Retirement II GP ULC)	Nova Scotia
Ventas Canada Retirement II LP (f/k/a Holiday Canada Retirement II LP)	Ontario
Ventas Canada Retirement III GP ULC (f/k/a Holiday Canada Retirement III GP ULC)	Nova Scotia
Ventas Canada Retirement III LP (f/k/a Holiday Canada Retirement III LP)	Ontario
Ventas Capital Corporation	Delaware
Ventas Carlisle, LLC	Delaware
Ventas Carroll MOB, LLC	Delaware
Ventas Cascade Valley, LLC	Delaware
Ventas Center MOB, LLC	Delaware
Ventas Copperfield Estates, LLC	Delaware
Ventas Crown Pointe, LLC	Delaware
Ventas CS, LLC (f/ka TH Merger Company, LLC)	Delaware
Ventas CW Finance, LLC	Delaware
Ventas Dasco MOB Holdings, LLC	Delaware
Ventas Devonshire (Lenox), LLC	Delaware
Ventas Eagle Lake, LP	Delaware
Ventas East Lansing, LLC	Delaware
Ventas Edgewood, LLC (f/k/a Ventas Paradise Valley, LLC)	Delaware
Ventas EH Holdings, LLC (f/k/a Ventas Cal Sun LLC)	Delaware
Ventas Euro Finance, LLC	Delaware
Ventas Fairwood, LLC	Delaware
Ventas Finance Holdings I, LLC	Delaware
Ventas Flagstone, LLC	Delaware
Ventas Forest Pines, LLC	Delaware
Ventas Framingham, LLC	Delaware
Ventas Garden Square of Casper, LLC	Delaware
Ventas Georgetowne, LLC	Delaware
Ventas Grantor Trust #1	Delaware
Ventas Grantor Trust #2	Delaware
Ventas Harrison, LLC	Delaware
Ventas Hartland Hills, LLC (f/k/a Ventas Millcreek, LLC)	Delaware
Ventas Healthcare Properties, Inc.	Delaware
Ventas Healthcare Realty, LLC	Delaware
Ventas Highland Estates, LLC	Delaware
Ventas Highland Trail, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Ventas HOL Holdings, LLC	Delaware
Ventas JCM Holdings, Inc.	Delaware
Ventas JSL Holdings, LLC	Delaware
Ventas JSL Property Holdings, LLC	Delaware
Ventas Kittery Estates, LLC	Delaware
Ventas Lafayette, LLC	Delaware
Ventas Lakewood Estates, LLC	Delaware
Ventas Las Palmas, LLC	Delaware
Ventas LHRET, LLC	Delaware
Ventas Life Sciences, LLC	Delaware
Ventas LP Realty, L.L.C.	Delaware
Ventas LS LP (f/k/a BMR-Wexford LP)	Delaware
Ventas LS MD, LLC	Delaware
Ventas LS TRS, LLC	Delaware
Ventas Luxembourg I S.à.r.l.	Luxembourg
Ventas Luxembourg II S.à.r.l.	Luxembourg
Ventas Mansion at Waterford, LLC	Delaware
Ventas McLoughlin, LLC	Delaware
Ventas Meadowbrook Place, LLC	Delaware
Ventas Meadows Elk Grove, LP	Delaware
Ventas Mezz Finance Leesburg, LLC	Delaware
Ventas Mezz Lender, LLC	Delaware
Ventas MO Holdings, LLC	Delaware
Ventas MOB Holdings II, LLC	Delaware
Ventas MOB Holdings, LLC	Delaware
Ventas MS Holdings, LLC	Delaware
Ventas MS, LLC	Delaware
Ventas Naples, LLC	Delaware
Ventas Nexcore Holdings, LLC	Delaware
Ventas NSG Finance, LLC	Delaware
Ventas NV GP LLC	Delaware
Ventas Oak Terrace, LP	Delaware
Ventas of Blackpool Limited	Jersey
Ventas of Farnham Limited	Jersey
Ventas of Hull Limited	Jersey
Ventas of Vancouver Limited	Jersey
Ventas Ontario OC, LLC	Delaware
Ventas Palms, LP	Delaware
Ventas Paradise Springs, LLC	Delaware
Ventas Pheasant Ridge, LLC	Delaware
Ventas Plano, LLC	Delaware
Ventas Plaza MOB, LLC	Delaware
Ventas Polo Park, LLC	Delaware
Ventas Provident, LLC	Delaware
Ventas Raleigh, LLC	Delaware
Ventas Realty Capital Healthcare Trust Operating Partnership, L.P. (f/k/a American Realty Capital Healthcare Trust Operating Partnership, L.P.)	Delaware
Ventas Realty Capital Healthcare Trust Sub REIT, LLC (f/k/a American Realty Capital Healthcare Trust Sub REIT, LLC)	Delaware



Entity Name	Jurisdiction of Organization or Formation
Ventas Realty, Limited Partnership	Delaware
Ventas Redwood, LP	Delaware
Ventas REIT US Holdings, LLC	Delaware
Ventas Rose Arbor, LLC	Delaware
Ventas Santa Barbara, LLC	Delaware
Ventas Senior Housing, LLC	Delaware
Ventas SH Holdings I, LLC	Delaware
Ventas Shasta Estates, LP	Delaware
Ventas Sierra Ridge, LP	Delaware
Ventas Skyline Place, LP	Delaware
Ventas SL Holdings II, LLC	Delaware
Ventas SL I, LLC	Delaware
Ventas SL II, LLC	Delaware
Ventas SL III, LLC	Delaware
Ventas Springs Holdings, LLC	Delaware
Ventas Springs JV, LLC	Delaware
Ventas SSL Beacon Hill, Inc.	Ontario, Canada
Ventas SSL Holdings, Inc.	Delaware
Ventas SSL Holdings, LLC	Delaware
Ventas SSL Lynn Valley, Inc.	Ontario, Canada
Ventas SSL Ontario II, Inc.	Ontario, Canada
Ventas SSL Ontario III, Inc.	Ontario, Canada
Ventas SSL Vancouver, Inc.	Ontario, Canada
Ventas SSL, Inc.	Delaware
Ventas Sugar Valley (f/k/a Ventas Tucson, LLC)	Delaware
Ventas Tanasbourne, LLC	Delaware
Ventas Trinity Finance, LP (f/k/a Ventas BKD Finance, LLC, f/k/a Ventas Mustang Finance, LLC)	Delaware
Ventas TRS, LLC	Delaware
Ventas UK Finance, Inc.	Delaware
Ventas UK I, LLC	Delaware
Ventas UK II, LLC	Delaware
Ventas University MOB, LLC	Delaware
Ventas Valencia, LP	Delaware
Ventas Ventures, LLC	Delaware
Ventas West Shores, LLC	Delaware
Ventas Western Holdings, LLC (f/k/a Ventas Cottonbloom Holdings, LLC)	Delaware
Ventas Whispering Chase, LLC (f/k/a Ventas Peoria, LLC)	Delaware
Ventas White Bear, LLC	Delaware
Ventas White Oaks, LLC	Delaware
Ventas Whitehall Estates, LLC	Delaware
Ventas Willow Gardens, LLC	Delaware
Ventas Willow Grove, LP	Delaware
Ventas Woods at Canco, LLC	Delaware
Ventas, Inc.	Delaware
Verdugo Management, LLC	California
Verdugo MOB, LP	California
Vernon Hills ACC, LLC	Delaware
VG Aventura MOB, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Victoria Court Realty, LLC	Maine
Victorian Retirement Group II Ltd.	British Columbia
Victorian Retirement Group III Ltd.	British Columbia
Victorian Retirement Group Ltd.	British Columbia
VSCRE Holdings, LLC	Delaware
VTCC Carroll MOB, LLC	Delaware
VTR Alpharetta, LLC	Delaware
VTR AMS, Inc. (f/k/a Ardent Medical Services, Inc.)	Delaware
VTR Applewood, LLC	Delaware
VTR Arboretum, LLC	Delaware
VTR Ardsley, LLC	Delaware
VTR Ascension SV, LLC	Delaware
VTR Assisted Living Virginia Beach, LLC	Delaware
VTR Assisted Living, Inc.	Delaware
VTR Austell, LLC	Delaware
VTR Autumn Hills, LLC	Delaware
VTR Avista MOB, LLC	Delaware
VTR Bailey MC, LLC	Delaware
VTR Ballwin, LLC	Delaware
VTR Baptist SA, LLC	Delaware
VTR Barret Avenue MOB, LLC	Delaware
VTR Barrington POB Holdings, LLC	Delaware
VTR Bay Spring, LLC	Delaware
VTR Baypoint Village, LLC	Delaware
VTR Bayshore, LLC	Delaware
VTR Bethlehem, LLC	Delaware
VTR Blossom Grove, LP	Delaware
VTR Briarcliff Manor, LLC	Delaware
VTR Buckhead, LLC	Georgia
VTR Burlingame, LP	California
VTR CA GP II, LLC	Delaware
VTR CAGP, LLC	Delaware
VTR Caleo Bay, LP	Delaware
VTR Campana Del Rio, LLC	Delaware
VTR Canyon Springs, LLC	Delaware
VTR Carmichael Oaks Land, LLC	Delaware
VTR Carmichael Oaks, LP	Delaware
VTR Center City, LLC	Delaware
VTR Chandler Villas, LP	California
VTR Chicago 93rd Street POB, LLC	Delaware
VTR Chico Assisted Living, LP	Delaware
VTR CO GP, LLC	Delaware
VTR Cobre Valley MOB, LLC	Delaware
VTR Copper Canyon, LLC	Delaware
VTR Countrywood, LP	Delaware
VTR Covell, LLC	California
VTR Covell, LP	Delaware
VTR Crossgate, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
VTR Crown Point (Parker) MOB, LLC	Delaware
VTR Cutter Mill, LLC	Delaware
VTR CW GP, LLC	Delaware
VTR Daly City, LP	California
VTR Darien, LLC	Delaware
VTR Deer Valley MOB II, LLC	Delaware
VTR Deer Valley MOB III, LLC	Delaware
VTR Deer Valley Parking, LLC	Delaware
VTR Delmar Place, LLC	Delaware
VTR Desert Samaritan, LLC	Delaware
VTR DOB III MOB, LLC	Delaware
VTR Downers Grove POB Holdings, LLC	Delaware
VTR Durham GP, LLC	Delaware
VTR Durham, LP	Delaware
VTR Eberle MOB, LLC	Delaware
VTR Edwards MOB, LLC	Delaware
VTR Elizabethtown, LLC	Delaware
VTR Evergreen Woods, LLC	Delaware
VTR Falmouth, LLC	Delaware
VTR FM Texas Holdings GP, LLC	Delaware
VTR Forest Hills, LLC	Delaware
VTR Forest Lake, LLC	Delaware
VTR Forest Trace, LLC	Delaware
VTR FV, LLC	Delaware
VTR Garden Park GP, LLC	Delaware
VTR Garden Park, LP	Delaware
VTR Glen Cove, LLC	Delaware
VTR Glen Oaks, LLC	Delaware
VTR Golden Creek, Inc.	Delaware
VTR Grand Oaks GP, LLC	Delaware
VTR Grand Oaks, LP	Delaware
VTR Great Neck, LLC	Delaware
VTR Greece, LLC	Delaware
VTR Green Valley Assisted Living, LLC	Delaware
VTR Hancock GP Holdings, LLC	Delaware
VTR Hancock MOB, LP	Delaware
VTR Hazel Crest, LLC	Delaware
VTR Heart Hospital Bondco, LLC	Delaware
VTR Heart Hospital, LLC	Delaware
VTR Hearthstone East, LLC	Delaware
VTR Hearthstone West, LLC	Delaware
VTR Henderson Assisted Living, LLC	Delaware
VTR Heritage LF, LLC	Delaware
VTR Hertlin House, LLC	Delaware
VTR High Plains, LLC	Delaware
VTR Highland Crossing, LLC	Kentucky
VTR Hillcrest Claremore, LLC	Delaware
VTR Hillcrest HS Tulsa, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
VTR Hillcrest Inn GP, LLC	Delaware
VTR Hillcrest Inn, LP	Delaware
VTR Hillcrest MC Tulsa, LLC	Delaware
VTR Hillsdale, LLC	Delaware
VTR Hillsdale, LP	Delaware
VTR Hudson, LLC	Delaware
VTR Huntington, LLC	Delaware
VTR II Acquisition LLC	Delaware
VTR III Acquisition LLC	Delaware
VTR Jefferson Clinic MOB, LLC	Delaware
VTR Johnson Ferry, LLC	Delaware
VTR JSL GP II, LLC	Delaware
VTR JSL GP, LLC	Delaware
VTR Jupiter, LLC	Delaware
VTR Kennebunk, LLC	Delaware
VTR Kew Gardens LLC	New York
VTR Kinghaven, LLC	Delaware
VTR Lake Havasu Assisted Living, LLC	Delaware
VTR Lakewood, LLC	Delaware
VTR Lancaster Assisted Living, LP	Delaware
VTR Las Posas, LP	California
VTR Longmeadow Place, LLC	Delaware
VTR Lovelace MC & Rehab, LLC	Delaware
VTR Lovelace Roswell	Delaware
VTR Lovelace Roswell Bondco, LLC	Delaware
VTR Lovelace Westside, LLC	Delaware
VTR Lovelace WH Bondco, LLC	Delaware
VTR Lovelace WH, LLC	Delaware
VTR LS 115 N. 38th Street, LLC (f/k/a Wexford 115 N. 38th Street, LLC)	Delaware
VTR LS 225 N. 38th Street UT, LLC (f/k/a Wexford 225 N. 38th Street UT, LLC)	Delaware
VTR LS 225 N. 38th Street, LLC (f/k/a Wexford 225 N. 38th Street, LLC)	Delaware
VTR LS 3701 Filbert Street UT, LLC (f/k/a Wexford 3701 Filbert Street UT, LLC)	Delaware
VTR LS 3701 Filbert Street, LLC (f/k/a Wexford 3701 Filbert Street, LLC)	Delaware
VTR LS 3750 Lancaster Avenue UT, LLC (f/k/a Wexford 3750 Lancaster Avenue UT, LLC)	Delaware
VTR LS 3750 Lancaster Avenue, LLC (f/k/a Wexford 3750 Lancaster Avenue, LLC)	Delaware
VTR LS 4320 Forest Park, LLC (f/k/a Wexford 4320 Forest Park, LLC)	Delaware
VTR LS Bailey Developer, LLC (f/k/a Wexford Bailey Developer, LLC)	Delaware
VTR LS Baltimore Garage, LLC (f/k/a Wexford Baltimore Garage, LLC)	Maryland
VTR LS Baltimore-Poppleton, LLC (f/k/a Wexford Baltimore-Poppleton, LLC)	Maryland
VTR LS BioPark Land Acquisition I, LLC (f/k/a Wexford BioPark Land Acquisition I, LLC)	Maryland
VTR LS BSP Funding, LLC (f/k/a Wexford BSP Funding, LLC)	Maryland
VTR LS BSP Partners, LLC (f/k/a Wexford BSP Partners, LLC)	Maryland
VTR LS Building 60 Developer, LLC (f/k/a Wexford Building 60 Developer, LLC)	Delaware
VTR LS Building 90 Developer, LLC (f/k/a Wexford Building 90 Developer, LLC)	Delaware
VTR LS Building 91 Developer, LLC (f/k/a Wexford Building 91 Developer, LLC)	Delaware
VTR LS Building 91 Manager, LLC (f/k/a Wexford Building 91 Manager, LLC)	Delaware
VTR LS Chesterfield Developer, LLC (f/k/a Wexford Chesterfield Developer, LLC)	Delaware
VTR LS Chesterfield Parking, LLC (f/k/a Wexford Chesterfield Parking, LLC)	Delaware



Entity Name	Jurisdiction of Organization or Formation
VTR LS Danforth, LLC (f/k/a Wexford Danforth, LLC)	Delaware
VTR LS Development, LLC (f/k/a Wexford Development, LLC)	Maryland
VTR LS Finance, LLC (f/k/a Wexford Finance, LLC)	Maryland
VTR LS Heritage Development, LLC (f/k/a Wexford Heritage Development, LLC)	Delaware
VTR LS Heritage Manager, LLC (f/k/a Wexford Heritage Manager, LLC)	Delaware
VTR LS Hershey Holdings One, LLC (f/k/a Wexford Hershey Holdings One, LLC)	Delaware
VTR LS Hershey Holdings Two, LLC (f/k/a Wexford Hershey Holdings Two, LLC)	Delaware
VTR LS Hershey, LLC (f/k/a Wexford Hershey, LLC)	Delaware
VTR LS Management, LLC (f/k/a Wexford Management, LLC)	Delaware
VTR LS Maryland BioPark 3, LLC (f/k/a Wexford Maryland BioPark 3, LLC)	Delaware
VTR LS Maryland BioPark One, LLC (f/k/a Wexford Maryland BioPark One, LLC)	Delaware
VTR LS Miami Property Acquisitions, LLC (f/k/a Wexford Miami Property Acquisitions, LLC)	Delaware
VTR LS ODU 2, LLC (f/k/a Wexford ODU 2, LLC)	Delaware
VTR LS ODU, LLC (f/k/a Wexford ODU, LLC)	Delaware
VTR LS Realty Holdings II, Inc. (f/k/a BioMed Realty Holdings II, Inc.)	Maryland
VTR LS Science Center 2, LLC (f/k/a Wexford Science Center 2, LLC)	Maryland
VTR LS Science Center 3, LLC (f/k/a Wexford Science Center 3, LLC)	Delaware
VTR LS University City HS, LLC (f/k/a Wexford University City HS, LLC)	Delaware
VTR LS-College Member LLC (f/k/a BMR-College Member LLC)	Delaware
VTR LS-George Member LLC (f/k/a BMR-George Member LLC)	Delaware
VTR LS-UCSC II GP, LLC (f/k/a Wexford-UCSC II GP, LLC)	Delaware
VTR Lynbrook, LLC	Delaware
VTR Manresa Business Trust	Maryland
VTR Manresa, LLC	Delaware
VTR Maple Wood, LLC	Delaware
VTR Marland Place II, LLC	Delaware
VTR Marland Place III, LLC	Delaware
VTR Marland Place, LLC	Delaware
VTR Marysville Assisted Living, LP	Delaware
VTR Merrywood, LLC	Delaware
VTR Mezz Guarantee LLC	Delaware
VTR Mezz II, LLC	Delaware
VTR Mezz III, LLC	Delaware
VTR Mezz LLC	Delaware
VTR Montego Heights, LP	California
VTR Nevada Assisted Living, Inc.	Nevada
VTR Newburgh, LLC	Delaware
VTR North Ridge, LLC	Delaware
VTR Northeast Holdings, LLC	Delaware
VTR Northport Development, LLC	New York
VTR Oak Knoll Land, LLC	Delaware
VTR Oak Knoll, LP	Delaware
VTR Oak Lawn POB, LLC	Delaware
VTR OCE Indy, LLC	Delaware
VTR Oroville Assisted Living, LP	Delaware
VTR Palm Desert, LLC	Delaware
VTR Palm Desert, LP	Delaware
VTR Papago Medical Park, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
VTR Penfield, LLC	Delaware
VTR Phoenix, LLC	Delaware
VTR Plainview, LLC	Delaware
VTR Plano, LLC	Delaware
VTR Pointe Rehab, LLC	Delaware
VTR Prairie Meadows, LLC	Delaware
VTR Property Holdings Carrollton GP, LLC	Delaware
VTR Property Holdings Carrollton, LP	Texas
VTR Property Holdings Copeland, LLC	Delaware
VTR Property Holdings Cypresswood, LLC	Delaware
VTR Property Holdings Grapevine, LP	Texas
VTR Property Holdings Richardson, LLC	Delaware
VTR Property Holdings Westchase GP, LLC	Delaware
VTR Property Holdings Westchase, LP	Texas
VTR Quail Ridge, LP	Delaware
VTR Raleigh GP, LLC	Delaware
VTR Raleigh, LLC	Delaware
VTR Raleigh, LP	Delaware
VTR Rancho Springs GP Holdings, LLC	Delaware
VTR Rancho Springs MOB, LP	Delaware
VTR Regency, LLC	Delaware
VTR Retirement and Assisted Living Briarcliff, LLC	Delaware
VTR Richland Hills, LLC	Delaware
VTR Riverdale LLC	New York
VTR Rock Creek, LLC	Delaware
VTR Roslyn, LLC	Delaware
VTR Rye Brook, LLC	Delaware
VTR Salisbury Business Trust	Maryland
VTR Salisbury, LLC	Delaware
VTR San Francisco MOB, LLC	Delaware
VTR Sandy, LLC	Delaware
VTR Science & Technology, LLC (f/k/a Wexford Science & Technology, LLC)	Maryland
VTR Scottsdale, LLC	Delaware
VTR Seaside, LLC	Delaware
VTR Senior Living LLC	Delaware
VTR Shaker, LLC	Delaware
VTR Sierra Vista Assisted Living, LLC	Delaware
VTR South Ogden, LLC	Delaware
VTR Springdale, LLC	Delaware
VTR SQ Holdings Corp.	Delaware
VTR SQ Interim Corp.	Delaware
VTR SQ, LLC	Delaware
VTR St. Matthews, LLC	Delaware
VTR Stamford, LLC	Delaware
VTR Stony Brook, LLC	Delaware
VTR Stratford, LLC	Connecticut
VTR Summit Hills, LLC	Delaware
VTR Sunlake, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
VTR Sunnyvale, LP	California
VTR Sutton Terrace, LLC	Delaware
VTR Swap II, LLC	Delaware
VTR Swap LLC	Delaware
VTR Tanglewood LLC	Delaware
VTR Tarzana GP, LLC	Delaware
VTR Tarzana, LLC	Delaware
VTR Tarzana, LP	Delaware
VTR Temecula GP, LLC	Delaware
VTR Temecula Land, LLC	Delaware
VTR Temecula, LP	Delaware
VTR Texas Holdings GP II, LLC	Delaware
VTR Texas Holdings GP, LLC	Delaware
VTR Texas Holdings II, LP	Texas
VTR Texas Holdings, LP	Texas
VTR Thunderbird Paseo Medical Plaza, LLC	Delaware
VTR Tinton Falls Corp.	New Jersey
VTR Tucker, LLC	Delaware
VTR Valley Manor, LLC	Delaware
VTR Valley View, LP	California
VTR Villa Campana II, LLC	Delaware
VTR Visalia Assisted Living, LP	Delaware
VTR Vistas Longmont, LLC	Delaware
VTR Willow Glen, LP	Delaware
VTR Windsor Woods, LLC	Delaware
VTR Woodbridge Place, LLC	Delaware
VTRAZ Manager, LLC	Delaware
VTR-EMRTS Holdings, LLC	Delaware
VTRLTH MAB I, LLC	Delaware
VTRLTH MAB II, LLC	Delaware
WE 100 College Street LLC	Delaware
WE BP Holdings II LLC	Delaware
WE George Street Holding LLC	Delaware
WE George Street, L.L.C.	Delaware
West Medical Office I, LP	South Carolina
West Tennessee Investors, LLC	Tennessee
Wexford Heritage Holding, LLC	Delaware
Wexford Heritage, LLC	Delaware
Wexford Miami Holding, LLC	Delaware
Wexford Miami, LLC	Delaware
Wexford UMB 2, LLC	Maryland
Wexford Winston-Salem Building 91, LLC	Delaware
Wexford Winston-Salem Holding, LLC	Delaware
Wexford-SCEC 3675 Market Street JV, LLC	Delaware
Wexford-SCEC 3675 Market Street UT, LLC	Delaware
Wexford-SCEC 3675 Market Street, LLC	Delaware
Wexford-UCSC 3737 Joint Venture, LLC	Delaware
Wexford-UCSC 3737 Member, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Wexford-UCSC 3737, LLC	Delaware
Wexford-UCSC II, LP	Delaware
WG 86th Street SH, LLC	Delaware
WG Alden Place, LLC	Delaware
WG Alpharetta, LLC	Delaware
WG Applewood SH, LLC	Delaware
WG Aquidneck Place SH, LLC	Delaware
WG Arboretum, LLC	Delaware
WG Austell, LLC	Delaware
WG Bay Spring SH, LLC	Delaware
WG Baypoint Village SH, LLC	Delaware
WG Bayshore SH, LLC	Delaware
WG Bayside Landing SH, LP	Delaware
WG Bethlehem SH, LLC	Delaware
WG Briarcliff Manor SH, LLC	Delaware
WG Buckhead SH, LLC	Delaware
WG Burlingame SH, LP	Delaware
WG Campana Del Rio SH, LLC	Delaware
WG Carmichael Oaks, LP	Delaware
WG Carrollton SH, LLC	Delaware
WG Center City SH, LLC	Delaware
WG Chandler Villas SH, LLC	Delaware
WG Chateau Gardens SH, LP	Delaware
WG Chateau San Juan SH, LP	Delaware
WG CO GP, LLC	Delaware
WG Collwood Knolls SH, LP	Delaware
WG Copeland SH, LLC	Delaware
WG Countrywood, LP	Delaware
WG Covell SH, LP	Delaware
WG Covina SH, LP	Delaware
WG Cranford SH, LLC	Delaware
WG Crossgate SH, LLC	Delaware
WG Crossroads Place, LLC	Delaware
WG Cutter Mill SH, LLC	Delaware
WG CW GP, LLC	Delaware
WG Cypresswood SH, LLC	Delaware
WG Daly City SH, LP	Delaware
WG Darien SH, LLC	Delaware
WG Del Rey SH, LP	Delaware
WG Del Sol SH, LP	Delaware
WG Delmar Place, LLC	Delaware
WG Draper Place, LLC	Delaware
WG Durham, LP	Delaware
WG East Northport SH, LLC	Delaware
WG Eastlake SH, LLC	Delaware
WG El Camino Gardens SH, LP	Delaware
WG Elizabethtown SH, LLC	Delaware
WG Encinitas SH, LP	Delaware



Entity Name	Jurisdiction of Organization or Formation
WG Evergreen Woods SH, LLC	Delaware
WG Falmouth SH II, LLC	Delaware
WG Falmouth SH, LLC	Delaware
WG Forest Hills SH, LLC	Delaware
WG Forest Lake SH, LLC	Delaware
WG Garden Park, LP	Delaware
WG Glen Cove SH, LLC	Delaware
WG GO GP, LLC	Delaware
WG Golden Creek SH, LP	Delaware
WG Grand Oaks, LP	Delaware
WG Grapevine SH, LLC	Delaware
WG Great Neck SH, LLC	Delaware
WG Greece SH, LLC	Delaware
WG Greenridge Place, LLC	Delaware
WG Guilderland SH, LLC	Delaware
WG Hacienda SH, LP	Delaware
WG Hamilton Heights Place, LLC	Delaware
WG Harborhill Place SH, LLC	Delaware
WG Hearthstone East SH, LLC	Delaware
WG Hearthstone West SH, LLC	Delaware
WG Heritage LF, LLC	Delaware
WG Hertlin House, LLC	Delaware
WG Highland Crossing SH, LLC	Delaware
WG Hillcrest Inn SH, LP	Delaware
WG Hillsdale SH, LP	Delaware
WG Hudson SH, LLC	Delaware
WG Huntington SH, LLC	Delaware
WG Johnson Ferry SH, LLC	Delaware
WG Jupiter, LLC	Delaware
WG Kennebunk SH, LLC	Delaware
WG Kew Gardens SH, LLC	Delaware
WG Kinghaven SH, LLC	Delaware
WG Kingwood SH, LLC	Delaware
WG Lakewood SH, LLC	Delaware
WG Larson Place, LLC	Delaware
WG Las Posas SH, LP	Delaware
WG Lincoln Place SH, LLC	Delaware
WG Longmeadow Place SH, LLC	Delaware
WG Lynbrook SH, LLC	Delaware
WG Manresa SH, LLC	Delaware
WG Marina Place, LLC	Delaware
WG Marland Place SH, LLC	Delaware
WG Merrimack Place, LLC	Delaware
WG Merrywood SH, LLC	Delaware
WG Montego Heights SH, LP	Delaware
WG Newburgh SH, LLC	Delaware
WG Oak Knoll, LP	Delaware
WG Palm Desert, Inc.	California



Entity Name	Jurisdiction of Organization or Formation
WG Penfield SH, LLC	Delaware
WG Plainview SH, LLC	Delaware
WG Plano, LLC	Delaware
WG Quail Ridge, LP	Delaware
WG Raleigh, LP	Delaware
WG Rancho Park SH, LP	Delaware
WG Regency SH, LLC	Delaware
WG Richardson SH, LLC	Delaware
WG Richland Hills, LLC	Delaware
WG Riverdale SH, LLC	Delaware
WG Roslyn, LLC	Delaware
WG Rye Brook SH, LLC	Delaware
WG Salisbury SH, LLC	Delaware
WG San Pablo SH, LLC	Delaware
WG Sandy SH, LLC	Delaware
WG Scottsdale, LLC	Delaware
WG Seville SH, LLC	Delaware
WG Shaker SH, LLC	Delaware
WG South Hills SH, LLC	Delaware
WG South Setauket SH, LLC	Delaware
WG Springdale SH, LLC	Delaware
WG St. Matthews SH, LLC	Delaware
WG Stamford SH, LLC	Delaware
WG Stony Brook SH, LLC	Delaware
WG Stratford SH, LLC	Delaware
WG Sugar Land SH, LLC	Delaware
WG Summit Hills SH, LLC	Delaware
WG Summit Ridge SH, LLC	Delaware
WG Sunlake SH, LLC	Delaware
WG Sunnyvale SH, LP	Delaware
WG Sutton Terrace SH, LLC	Delaware
WG Tamalpais Creek SH, LP	Delaware
WG Tanglewood SH, LLC	Delaware
WG Tarzana, LP	Delaware
WG Temecula, LP	Delaware
WG Tinton Falls SH, LLC	Delaware
WG Tucker, LLC	Delaware
WG Valley View SH, LP	Delaware
WG Villa Campana, LLC	Delaware
WG Virginia Beach SH, LLC	Delaware
WG Vistas Longmont, LLC	Delaware
WG Westchase SH, LLC	Delaware
WG Weston Place SH, LLC	Delaware
WG Willow Glen SH, LP	Delaware
WG Willow Park SH, LLC	Delaware
WG Windsor Woods SH, LLC	Delaware
WG Woodbridge Place SH, LLC	Delaware
WG Woodlands SH, LLC	Delaware



Entity Name	Jurisdiction of Organization or Formation
Whitby Retirement Group II Ltd.	British Columbia
Whitby Retirement Group Ltd.	British Columbia
Woodbriar Senior Living, LLC	Delaware
Woodlake Realty, LLC	Delaware
WWMLD Limited Liability Company	Wisconsin
Xenia Nominee LLC	Delaware
Xenia Nominee LP	Delaware

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Ventas, Inc.:

We consent to the incorporation by reference in


•	the Registration Statement (Form S-4 No. 333-198789) pertaining to shares of Ventas, Inc. common stock issued in connection with the merger with American Realty Capital Healthcare Trust, Inc.;


•	the Registration Statements (Form S-3 No. 333-200781, 333-209016 and 333-209017) pertaining to the common stock of Ventas, Inc.;


•	the Registration Statement (Form S-3 No. 333-202586) pertaining to common stock, preferred stock, depository shares, warrants, debt securities and guarantees of debt securities of Ventas, Inc. and debt securities and guarantees of debt securities of Ventas Realty, Limited Partnership;


•	the Registration Statement (Form S-8 No. 333-183121) pertaining to the Ventas, Inc. 2012 Incentive Plan;


•	the Registration Statement (Form S-8 No. 333-173434) pertaining to the Nationwide Health Properties, Inc. 2005 Performance Incentive Plan, as Amended;


•	the Registration Statement (Form S-8 No. 333-136175) pertaining to the Ventas, Inc. 2006 Incentive Plan and Ventas, Inc. 2006 Stock Plan for Directors;


•	the Registration Statement (Form S-8 No. 333-126639) pertaining to the Ventas Employee and Director Stock Purchase Plan;


•	the Registration Statement (Form S-8 No. 333-118944) pertaining to the Ventas Executive Deferred Stock Compensation Plan and Ventas Nonemployee Director Deferred Stock Compensation Plan;


•	the Registration Statement (Form S-8 No. 333-61552) pertaining to the Ventas, Inc. Common Stock Purchase Plan for Directors,

and in the related Prospectuses of Ventas, Inc. of our reports dated February 13, 2017, with respect to the consolidated balance sheets of Ventas, Inc. as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and the financial statement schedules II, III and IV for the three-year period ended December 31, 2016, and the effectiveness of internal control over financial reporting as of December 31, 2016, which reports appear in this December 31, 2016 annual report on Form 10-K of Ventas, Inc.

/s/ KPMG LLP

Chicago, Illinois

February 13, 2017

Exhibit 31.1

I, Debra A. Cafaro, certify that:

1. I have reviewed this Annual Report on Form 10-K of Ventas, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report, any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2017



/s/ Debra A. Cafaro
Debra A. Cafaro Chairman and Chief Executive Officer

Exhibit 31.2

I, Robert F. Probst, certify that:

1. I have reviewed this Annual Report on Form 10-K of Ventas, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2017



/s/ Robert F. Probst
Robert F. Probst Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Ventas, Inc. (the "Company") for the year ended December 31, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Debra A. Cafaro, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 13, 2017



/s/ Debra A. Cafaro
Debra A. Cafaro Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Ventas, Inc. (the "Company") for the year ended December 31, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert F. Probst, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 13, 2017



/s/ Robert F. Probst
Robert F. Probst Executive Vice President and Chief Financial Officer